Authorities in Bali have ruled out a bomb and said that a “short circuit” near the fuel tank might have been the cause of the explosion.
"We are sad to confirm that one person from Austria is among the victims of the boat accident," Austrian Foreign Ministry spokesman Thomas Schnöll said.
The dead woman was named as Kathrin Z. of Bad Mitterndorf in Styria. Another woman is believed to have lost her legs in the explosion.
He added that the woman was one of four Austrians believed to have been on board the boat, and that an Austrian man had been injured in the explosion but is not in a critical condition. Schnöll said the Austrians were not part of a tour group but had organised the holiday themselves.
The boat was carrying at least 30 passengers, all foreigners, and four crew. It was heading to the nearby holiday island of Gili Trawangan.
Among the passengers were also tourists from Britain, France, Italy, Portugal, and Germany, according to news agencies.
Karangasem police chief Sugeng Sudarso told News Corp Australia the victims were evacuated to a clinic in nearby Manggis Village.
“There are many victims injured, mostly foreigners,” Mr Sudarso said.
“The boat departed from Padangbai at 9.35. Five minute after they depart, around 200 metre from the harbour, there was smoke seen from the boat. Then there was an explosion,” he said.
“From 35 passengers, there are 19 passengers injured and one died. We haven't identified the victim who died. We still trying to identify the victim.”
“The explosion come from the fuel tank and the engine. We are still investigating the exact cause of the explosion,” Mr Sudarso said.
He said the incident appeared to be an accident.
“From initial investigation we allege that that is pure accident. We alleged that there was a gas compression under the deck from the fuel tank. Maybe the explosion was triggered by electricity short circuit,” Mr Sudarso said.
“The forensic laboratory will do another investigation on the boat tomorrow to make sure about the cause of the accident.”