The 61-year-old woman from Morecambe, who has not been named, was driving a Kia Sorento which was in collision with an oncoming single decker bus.
She was pronounced dead at the scene.
The driver of the bus and the seven passengers on board all suffered a range of injuries and were treated by the ambulance service.
The incident happened at around 11.40am on Tuesday.
The road was closed for four hours while a collision investigation took place.
PS Claire Pearson of the Road Policing Unit said: “This is a tragic incident where a woman has sadly died and my thoughts remain with her family and friends at this time.
“An investigation to establish how the collision took place is already underway and we would appeal to any witnesses who have not yet spoken to us to make contact.”
Anyone with information about the collision can contact police on 101 quoting log 448 of May 16th.