The 37-year-old, named in local media as Mersane Warria, was charged with eight counts of murder after the bodies of the children -- four girls and four boys aged between two to 14 -- were found in the northern city of Cairns on Friday morning.
The murders have stunned Australia, still reeling from a dramatic siege in a central Sydney cafe this week, which left two hostages and a gunman dead, and prompted widespread shock and anger.
"I would suspect it might be the most tragic event we have had to deal with," Cairns detective inspector Bruno Asnicar told reporters.
"All of the family has been advised (of the charges). This is very raw and it is a very emotive time for everybody. The family is deeply upset but the community is pulling together."
The woman remained under guard in a Cairns hospital after being arrested on Saturday and appeared before a magistrate at a bedside hearing, Queensland police said in a statement.
Police said the woman, who is the mother of the seven younger children and the aunt of the 14-year-old girl, has sustained injuries that are not life-threatening.
There will be a formal hearing in a Cairns court on Monday, with police set to oppose bail.