The 34-year-old woman was found with multiple stab wounds to her neck and back in a villa in the suburb of Canggu, north of the major tourist area, Kuta.
The woman has been named in some reports as Heidi Murphy of Sydney.
DFAT officials would not confirm the name, but said consular assistance was being provided to the woman's family.
A police investigation was underway in Bali, DFAT said.
"Indonesian authorities are investigating the woman's death," the spokesman said.
"The Australian consul-general in Bali and the department in Canberra are providing consular assistance to the woman's family."
Ms Murphy, of Sydney, owned a garment and textile business in the neighbouring suburb of Kerobokan, News Ltd said.
She was last seen alive on Saturday evening by a friend, it said.
Police told the paper there were no signs! of a break-in at Ms Murphy's home and no murder weapon had yet been found.
It's believed she fought with her attacker as her hands and ears were also injured, they said.
AAP
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Source: http://www.thewest.com.au/default.aspx?MenuID=145&ContentID=57975
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