Emergency services were called to the collision between the woman's northbound Toyota sedan and a southbound four-wheel-drive shortly before 8am.

The driver of the 4WD, a 47-year-old man, sustained chest injuries, including broken ribs, and a broken ankle.

Both drivers were trapped inside their vehicles for almost an hour and were flown to St George Hospital where they were in a stable condition last night.

An Ambulance Service of NSW spokesman said paramedics arrived to find the woman's leg was "partially severed".

"She had a pretty nasty compound fracture," he said.

However, he said those on scene were hopeful doctors would be able to save the leg.

"They will do everything they can."

Shoalhaven police inspector John Behrendt praised the work of emergency service personnel who attended the crash, and said those involved worked "methodically for the benefit of the patients".

The first crews were on the scene within 15 minutes of the crash happening.

The crash delayed traffic for most of the day, and diversions were in place.

It is not yet clear what caused the incident, and the Lake Illawarra crash investigation unit has begun inquiries.

Meanwhile, Batemans Bay police say a fallen tree caused a three-vehicle pile-up on the Princes Highway yesterday morning, with one driver sustaining a broken leg. Highway Patrol supervisor Sergeant Angus Duncombe said a small car hit a tree felled in wild weather between 2.45am and 2.50am yesterday, near the Mount Agony Road intersection.

Despite the driver's efforts to warn following vehicles, a pantec truck hit the rear of the first car, with the truck driver sustaining a broken leg.

A third vehicle, a prime mover, then collided with the pantec.

The driver of the second vehicle was taken to Batemans Bay Hospital.