GLADSTONE Water Police have headed to an area near Sea Hill on Curtis Island to try and locate the sunken boat.
Sergeant John Kernan said at first police suspected the boat had hit rocks but he said that was now unclear.
"It's looking like the boat capsized due to the weather and conditions on the water," Srg Kernan said.
"There was quite a bit of chop."
Srg Kernan said police needed to locate the sunken boat and seize it to carry out further investigations.
He said the boat was 4.6m long, similar to a tinnie, and the family caught up in the ordeal had been on their way back into Gladstone.
GLADSTONE Water Police are currently meeting with emergency services in an attempt to determine the cause of last night's fatal boating incident.
Officer in charge of Gladstone Water Police John Kernan said his team was still trying to piece together how the boat capsized, which led to the death of a 73-year-old woman.
He said the boat was "reportedly sunk" however he did not know what type or the size the boat was.
Sgt Kenran said if the boat had sunk then an operation to salvage the vessel would need to be done.
"If it's tinnie then we could probably float it, depending on the tides," he said.
"Depending on what we find out we may be able to bring the boat in later today."
It's understood the boat capsized off the coast of the Sea Hill area, which is on the northwest point of Curtis Island.
Gladstone Volunteer Marine Rescue boats were used to transfer paramedics, police and CIB officers through The Narrows to the Sea Hill area.
RACQ Capricorn Helicopter Rescue Service air crewman Dave Paterson said he understood the boat capsized at "last light".
"On arrival the occupants had been picked up by another vessel and struck flares to alert us to their position," Mr Paterson said.
"Being unable to land we relocated half a mile down the coast where the occupants were brought to us.
"Life saving procedures were performed on the ground and in the air by critical care paramedics (on a 14-month-old boy)."
Mr Paterson said the baby boy was reportedly rescued from under the boat by family members after being trapped there for three minute.
It's understood the baby had been "unresponsive and unconscious" after being rescued but was breathing by the time the rescue helicopter arrived.
"The baby was in a serious condition…and without paramedics things could have been worse," Mr Paterson said.
He said the 34-year-old Bracewell woman, who was the mum of the baby and daughter to the woman who died, was understandably distraught and in shock.
The woman and baby were transported to Rockhampton Hospital, both in a stable condition.
Mr Paterson said he could not see whether the boat remained slightly afloat in the water.
RACQ Capricorn Helicopter Rescue Service attended last nights fatal boating incident at the Northern end of Curtis Island.
RACQ said it was called out at 7.30pm after a boat capsized where a 14-month-old boy was trapped under the boat for three minutes, "before being pulled unconscious by family members who conducted CPR".
"The two Critical Care Paramedics from the helicopter conducted further lifesaving procedures for 20 minutes before he and his mother were air lifted to the Rockhampton Base Hospital," an RACQ spokeswoman said.
The was now in a stable condition at Rockhampton.
ONE elderly woman is dead after a boat she was in capsized off Curtis Island.
The 73-year-old was pronounced dead at the scene after police received reports at 7.20pm last night that a boat carrying four people had capsized.
A 34-year-old Bracewell woman and a 14-month-old baby boy were transported to Rockhampton Hospital for treatment of "non-life threatening injuries".
Police said a 32-year-old Mount Larcom man was not injured during the incident.
Police said nearby boats retrieved the people from the water before emergency services arrived.
Police and Maritime Safety Queensland are investigating the "fatal marine incident".
The police will prepare a report for the coroner.
The woman who died was from Torquay.