According to the Herald-Sun, an ultrasound clinician said that before the termination she checked the babies three times "because she didn't want to make a mistake". The healthy baby was in a separate amniotic sac.
Also in the room during the operation were a doctor, a nurse and the patient's husband.
A hospital spokeswoman said: "This is a terrible tragedy and the hospital is deeply sorry for the loss suffered by the patient and her family. We are conducting a full investigation."
The late-term termination was recommended to the woman, who had already named both babies, following a review of her case.
She was told the baby's heart defect would require years of surgery, if he survived at all.
The state's Health Services Commissioner, Beth Wilson, told ABC radio yesterday that she had never dealt with a case like it.
"The hospital needs to ... find out exactly what happened and why," she said. "This is an extremely distressing situation." She said the procedure would have been complicated, but "that doesn't mean that the greatest care shouldn't still have been taken".
The Victorian Premier, Ted Baillieu, said the Government would ensure the investigation was thorough. Lorraine Long, of the Medical Error Action Group, a victim support group, said the case left her speechless.
