Police said the 39-year-old woman was riding northbound with her husband. The pair were on separate motorcycles.
The accident on State Highway 1, just south of Kaihiku Rd, between Clinton and Balclutha, happened about 6pm and was attended by emergency services from Balclutha and Waiwera South.
Sergeant Martin Bull, of Balclutha, said it appeared the woman was taking a moderate left-hand bend when she collided with a south-bound car towing a boat.
Her husband, who was following, collided with her bike and had also fallen, but was not injured.
The woman was killed by the initial impact with the car, Sgt Bull said.
The driver and passenger of the car received minor injuries.
The dead woman's name would not be released until family had been notified.
The road was closed for about three hours, and diversions put in place while the Invercargill Serious Crash Unit attended the scene.
Despite this fatality and the death in a crash near Mataura of Otago University student Jessie Lineham, of Invercargill, and nearly a dozen drinking-driving incidents, police have praised the actions of Otago motorists during Labour Weekend.
We've had the usual idiots drink-driving around Dunedin but, out on the highways, the holiday traffic seems to have been pretty good - except for the two [fatal] incidents down south, and we don't know the details of those yet," Senior Sergeant Craig Brown said last night.
Otago travellers had heeded warnings about speed and alcohol, police said.
"We've been really impressed with the speed and attitude of drivers," Senior Sergeant Mel Aitken said last night.
Snr Sgt Aitken said a national advertising campaign and a high police presence had helped.
However, nationally, police were disappointed.
"We are tremendously saddened by so many needless deaths," national police roading manager Superintendent Paula Rose said yesterday.
"Every single one of these crashes was avoidable. They all involved either speed, alcohol or crossing the centre line - the very things that we have been urging drivers take particular care with."
The lowest Labour Weekend toll since records began in 1956 was three - in 2002, 2003, 2005 and 2006.
The worst tally was in 1978, when 16 people were killed.
The holiday period ends at 6am.
