Surfers, bystanders and paramedics tried to give him CPR, but he had a critical arm injury and could not be revived.
The attack occurred off Shelly and Emerald beaches in Coffs Harbour, New South Wales - about 330 miles (530km) north of Sydney.
Beaches in the area were busy at the time of the incident on Sunday, as families celebrated Father's Day in the country.
Aaron Armstrong, who saw what happened, said it was the first shark attack in the community that he and other locals knew of.
He added: "[We were] just out in the surf and we just saw a few people getting out of the water and we were pretty excited to be honest because we were like 'yes, less people in the water'.
"So we started to paddle down to where these people were and then we got called out of the water.
"Ran down to see what was happening, saw a man without an arm, lots of blood and lots of people helping him so we just stood by just to see if we needed to help anymore.
"And then we just proceeded to watch people work on him, CPR for a good hour, hour and a half, before the ambulances arrived and then, yeah, it doesn't look good."
Although New South Wales is under a coronavirus lockdown, people can leave their homes for exercise.
Before Sunday's incident, the most recent fatal shark attack in Australia was in May.
Glenn Coleman, another witness, said there has been a "lot more shark activity over recent years" - and many experienced surfers now no longer want to go into the water.
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