The 37-year-old woman, identified by local media as Mersane Warria, was charged with eight counts of murder in a bedside hearing at the Cairns Base Hospital on Sunday, Queensland state police said.
The suspect, who has not been formally named by the police, is recovering from stab wounds in the hospital under police guard.
Police were called to the home in the Cairns suburb on Friday morning after they received a report of a woman with serious stab wounds. They found the bodies of eight children aged between two to 14 in the home along with the woman injured in the chest.
Seven of the children were siblings while the eighth one is a niece of the woman arrested in the incident.
Officials have not revealed the cause of the death which was previously believed to be a mass stabbing, but said they were looking into a number of scenarios, including suffocation.
Autopsies on the children are continuing to officially determine the causes of death.