The incident unfolded in Charleville, 600km west of Toowoomba in southwest Queensland, after police rushed to reports of a serious assault at a home about 6pm on Wednesday.
Residents across a three-street block were ordered to stay inside for nearly eight hours as specialist police swarmed the area and declared an emergency situation.
The public safety declaration was revoked shortly before 2am on Thursday.
Inside the home, officers found a 45-year-old man and a 23-year-old woman dead, while a young child was found alive at the property.
Police are treating the deaths as a murder-suicide. A crime scene has been established and a report will be prepared for the coroner.
No one else was injured and police have not confirmed whether the man was armed.
The case will be investigated by the Ethical Standards Command.
Charleville mayor Shaun Radnedge said the survival of the child was a rare shard of hope in a heartbreaking day for the tight-knit community.
"Our community is devastated by the tragic events that unfolded in Charleville overnight," he said.
"We are a close-knit town, and an incident of this nature is felt deeply by many people.
"The little baby has survived. I don't know how or don't know why, but it's there."
The council is organising support for the community through the days ahead.
"We encourage anyone affected by this tragedy to reach out to family, friends, neighbours or local support services," Mr Radnedge said.
"Please do not carry this alone. Charleville is strong because its people look out for one another.
"In the coming days, I ask everyone to show compassion, avoid speculation and give those directly impacted the privacy and respect they need at this incredibly difficult time."Police are expected to provide more information in a press conference on Thursday morning.
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