The woman is the fourth person to be attacked on the same stretch of coast in a week.
Witnesses described how she screamed for help after being mauled by the animal close to a reef.
In one of the previous cases a swimmer had an arm bitten off while another lost a foot.
Earlier this week, after the first three attacks, two sharks were caught - an oceanic whitetip and a mako - and the beaches were reopened by officials.
However, experts had warned that there was at least one shark still at large.
All watersports activities have now been closed at the resort - though diving sites remain open.
Jochen Van Lysebettens, manager of the Red Sea Diving College, said the dead woman, aged 70, was a regular visitor to the luxury Hyatt Regeny hotel at the resort.
She lost her right leg and elbow in the attack.
He told Sky News: "The woman was just swimming to stay in shape. Suddenly there was a scream of help and a lot of violence in the water.
"The lifeguard got her on the reef and he noticed she was severely wounded."
Mr Van Lysebettens said 40 diving instructors had been out in the waters in recent days to check for sharks after the initial catch.
"They found nothing," he said. "Based on that, the authorities opened the dive sites again and opened the water sports activities again."
The diving expert said that he believed the killer shark - thought to be another whitetip - had also carried out the previous attacks.
He suggested that the shark may have been drawn to the coast by dead sheep which had been left in the water.
"I have no idea why this shark is behaving so aggresively," he continued.
"This must have been triggered by something in the past. Unfortunately in this case he is now looking at snorkellers."
Marine biologist Dr Elke Bojanowski said that some sharks mistook swimmers and snorkellers for dead or injured animals floating on the surface.
"This is safe and easy prey for large sharks," she said.
One holidaymaker who has just returned from Sharm el-Sheikh said she was appalled that tourists were not given information about shark attacks.
"We saw a diver being brought out of the water after being attacked by a shark," said Agnieszka Gogolewsk, who lives near Kettering.
"I think he was Russian and was involved in the second of the three attacks we have heard about.
"Only an hour after the attack we saw people were still swimming. It is terrible that no one was warning tourists.
"The hotels were saying nothing and people were diving and swimming about unaware of the danger."
Mohammed Salem, director of South Sinai Conservation, said the German victim died a day after Sharm el-Sheikh reopened its beaches.
The resort's mayor, Gamal al-Mahdi, said the beaches had initially been reopened after authorities determined there was no further threat off the coast.
Up to four million tourists - including many Britons - visit the Red Sea coast every year.
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