She died at the scene of the crash.
Police said the driver of the late model Nissan SUV was taken to hospital as a precaution. The drivers were the only occupants of the vehicles.
Her death comes on top of a devastating month for road fatalities in the Western Bay after five Tongans were killed in a crash with a truck at Aongatete on August 3.
An elder from Te Puna's Paparoa Marae, Kiritoha Tangitu took part in a ceremony yesterday called te whakatapuranga to spiritually cleanse and purify the spot where she died.
He was also called to the Aongatete crash site to give a blessing before the bodies of the Tongans were removed from the car.
Mr Tangitu said the fatal crash was something locals had been dreading for years.
"We have been waiting for this to happen."
He has called on roading authorities to extend the 50km/h speed zone past the primary school to before where Te Puna Rd curves down the hill and goes past the intersection with Te Puna Station Rd.
Western Bay Mayor Ross Paterson said he had no problem with the council having a look at that stretch of road as part of its speed limit reviews.
''Let's find out the details [of the crash] first and see if there are any road safety improvements that we can bring.''
Another kaumatua who took part in the ceremony, Billy Borell, said the corner was very dangerous, with many cars going through the hedge or hitting the power pole.
Ricky Kuka, who assisted the kaumatua in lifting the tapu, said the intersection was a very awkward set-up with cars coming down the hill at speed.
At the very least, the men wanted a warning sign put before Te Puna Rd descended down and around past the intersection.
A resident who lives next to the scene of the accident said that every day he heard horns beeping from drivers braking to avoid crashes at the intersection.
Many drivers came down the hill too fast.
The man, who did not wish to be named, said he had lived in the house for two years and was seeing near misses nearly every day. The worst time was when parents were picking up their kids from school.
He was not at home when the crash happened but knew something terrible had happened when he saw all the police markings on the road later in the morning.
One of the residents who went out to help at the crash scene, Enslin Van Schalkwyk, said people drove down the hill too quickly.
''They are not taking the corner at the correct speed.''
Inquiries among Te Puna locals by the Bay of Plenty Times revealed the woman was well respected, with one resident saying she was a great contributor to the community and loved by everyone. She was known as a keen gardener.
Tauranga Fire Service senior station officer Len Sabin said rescue equipment was used on the car holding the deceased driver.
They also provided lighting for the police crash investigation team scene until 4.30am.
