The two children - aged 10 and 11 years - miraculously managed to scramble free from the car which entered the water just off Kennedy Quay by the upper city quays.
Both were rescued and were taken to Cork University Hospital (CUH) last night for precautionary medical assessment.
They were treated for shock but are expected to be discharged into the care of a family member today.
Both will be brought to their south city home to recover from their ordeal.
However, while both were deeply shocked they had not suffered any serious injury.
The car sank minutes after entering the water as shocked onlookers ran to help.
The woman, who was the driver, was trapped in the vehicle as it sank.
A huge search and rescue operation was launched which involved the gardaí, Cork Fire Brigade, paramedics, Coast Guard, Naval Service, Cork River Rescue and Mallow Search and Rescue.
A number of pedestrians who were in the area also raced to help.
The operation was coordinated by the Coast Guard's Sikorsky Rescue 117 helicopter which hovered overhead to use its specialist search cameras.
The incident occurred shortly after 8pm when high tide had almost reached its peak.
After an assessment of the scene, Naval Service divers were able to enter the water shortly before 10pm. They were able to locate the body of the woman and it was successfully recovered from the water.
Special lifting cables were attached to the car and it was removed from the water by a heavy lift crane which had been brought to the scene at 12.45am. It was taken to a secure area for later examination.
The woman's body was transferred to the City Morgue at CUH where a post mortem examination will be conducted later today.
A garda investigation into the full circumstances of the incident is now underway.
CCTV security camera footage from around the area will be examined by gardaí to determine the precise movements of the vehicle involved in the minutes leading up to the accident.
It is understood the woman and the children had been in a city restaurant for a meal in the hours before the tragedy.
Gardaí said they are treating the incident as a tragic accident with a report on the matter set to be compiled for the Cork City Coroner.
Detectives have appealed for anyone who witnessed the incident or who may have been in the area around 8pm last night and whose vehicles are equipped with dash-camera footage to contact them to assist their investigation.