The man, named in media reports as Greg Pickering, 55, was with a diving crew from the Southern Wild Abalone company when the shark struck off Poison Creek beach, east of the town of Esperance.
"Obviously, there has been some substantial injuries (as) with any encounter with a shark, but at this stage (the details are) still quite sketchy," the firm's owner Marcus Tromp told the Australian Broadcasting Corporation.
"I understood that he was still conscious and in good hands as far as first aid goes."
The ruggedness and remoteness of the area, in a wilderness park and accessible only by four-wheel drive, complicated his retrieval and transport by ambulance to Esperance, 160 kilometres (100 miles) from the dive site.
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The Royal Flying Doctor Service said it had dispatched a plane to collect Pickering from Esperance and take him to Perth for treatment.
According to Fairfax Media it was the experienced diver's second shark encounter in the past decade, having been bitten by a 1.5 metre bronze whaler shark while spear-fishing with a friend in the west coast town of Cervantes in 2004.
It is the first shark attack reported in Australia since December 2012, when a paddle-boarder lost a finger and suffered a serious bite to his thigh at Diamond Head north of Sydney.
There has not been a fatality since July 2012 when a surfer was bitten in half off Western Australia, capping an unprecedented spate of five deadly attacks by the marine predators that sparked calls for a cull.
Local marine scientists have described Australia's west coast as the deadliest shark attack zone in the world, and a tagging and tracking programme has been launched in a bid to limit fatalities.
Experts say attacks are increasing in line with population growth and the popularity of water sports.