The accident occurred on the N13 between Letterkenny and Derry near Newtowncunningham.
A Garda statement said: “At approximately 3.30pm a female aged in her 30s was fatally injured when the car she was driving collided with a bus on the N13 between Letterkenny and Derry near Newtowncunningham. She was pronounced dead at the scene.
“Her body was removed to Letterkenny General Hospital for a post-mortem examination. Three children travelling in the car at the time were taken by ambulance to Altnagelvin Hospital in Derry. The driver of the bus was uninjured.
“The road is currently closed to traffic and diversions are in place. Garda forensic collision investigators are examining the scene.”
Anyone with information is asked to contact Letterkenny Garda Station 074-9167100 or the Garda Confidential Line 1800 666 111.