It happened after a mother who was expecting twin boys was told by doctors in Melbourne, Australia that one of her babies had a serious heart defect. The mum decided to have her baby aborted, but surgeons accidentally terminated the healthy twin instead.
The sick child then also died after an emergency Caesarean operation.
"She went to hospital with two babies and now she has none," a friend told Australia's Herald Sun newspaper.
"And she had the heartache of giving birth to her sick baby. She's traumatised."
Reports said the woman's husband, a nurse, a doctor and the ultrasound clinician were in the operating room at the time of the abortion error.
The family is said to be struggling to comprehend what happened and is now considering legal action.
A spokesman for the hospital where the tragedy happened said: "The Royal Women's Hospital can confirm a distressing clinical accident occurred on Tuesday.
"This is a terrible tragedy and the hospital is deeply sorry for the loss suffered by the patient and her family. We are conducting a full investigation and continue to offer the family and affected staff every support."