The Dreamworld theme park, which has over 40 rides and attractions, said at least three people died, but police said four were dead.
"Four adults have been confirmed as being deceased," Queensland Police said in a statement, adding the incident involved a conveyor belt.
The Gold Coast Bulletin said the victims were on the Thunder River Rapids ride, which uses a conveyor belt and six-person circular rafts.
"Dreamworld's focus and priority is with the families of those involved in this tragedy and will be providing an update to the public as soon as information becomes available."
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A witness who was about to go on the ride said "everyone was screaming" after a raft apparently flipped.
"We saw (a) little girl and we believe it was her mum because it was just her and her little sister that was an infant," Lia Capes told the Australian Broadcasting Corporation.
Another witness, who did not want to be named, told the Gold Coast Bulletin: "My sister and niece were on the ride, they are so traumatised, there is a woman hanging by her foot, crushed from the ride."
Gold Coast mayor Tom Tate said it was a "very sad day for our city".
"Our thoughts are with the families of those affected -- and the emergency staff in attendance... A truly sad day for all," Tate added on Facebook.