Gardaí confirmed to Donegal Daily a short time ago that the 30-year-old victim passed away in hospital this afternoon.
She was injured in a collision outside Newtowncunningham yesterday.
Gardaí are appealing for witnesses to come forward.
A spokesman said: “Gardaí in Letterkenny are appealing for witnesses following a fatal traffic collision in Newtowncunningham, Co. Donegal.
“At approximately 8.30am yesterday two cars collided on the N13 at Castleforward, Newtowncunningham.
“The driver in one of the cars, a 30-year-old female, was taken by ambulance to Letterkenny General Hospital where she passed away this afternoon.
“The driver of the second car, a man in his 40s, was also taken to hospital with minor injuries.
“A technical examination of the scene was carried out and the local Coroner has been notified.
“Anyone with information is asked to contact Letterkenny Garda Station 074-9167100 or the Garda Confidential Line 1800 666 111.”