A woman (37) has been arrested for murder over the killings of eight children at a house in Australia.

She is the mother of seven of the children, who had all been stabbed to death. The eighth child was her niece.

The unnamed suspect is currently under guard at a hospital, where she is recovering from stab wounds to the chest.

Queensland Police Detective Inspector Bruno Asnicar said she has not yet been formally charged with killing the youngsters, who were aged from 18 months to 15 years old.

Police have not said how they died, but are examining several knives in the Cairns home that may have been the murder weapon. Mr Asnicar said the woman is lucid and talking to police.

"We're not looking for anybody else - we're comfortable that the community at large is safe," he said.

Officers were called to the suspect's home in the suburb of Manoora on Friday after reports of a woman suffering from stab wounds.

The bodies were discovered during a search of the house.

Mr Asnicar dismissed rumours the family had received calls from the Department of Social Services.

"It's not a problem house as has been speculated," he said.

"This is an ordinary neighbourhood - a lot of good people, a lot of kids in the area. This is something that has caught everybody by surprise. It's just an absolutely tragic thing."

Residents held a candlelight vigil for the children on Friday evening and laid flowers and toys outside the home.

The family were members of the Torres Strait Islander community, a group of indigenous Australians viewed as distinct from the broader Aboriginal community due to their origins on islands off the Queensland coast.

Australian Prime Minister Tony Abbott described the deaths as "heartbreaking".

He added: "All parents would feel a gut-wrenching sadness at what has happened. This is an unspeakable crime. These are trying days for our country."

The acting Queensland Premier Tim Nicholls says it is hard to imagine the impact on the community.