She said the beach then erupted into screams, with parents yelling at their children to get out of the water.
Lifesavers and other beachgoers performed CPR on the boy before ambulances arrived.
Paramedics then took the boy to Mackay Base Hospital for further treatment but he could not be saved.
A police spokesman said he had died by 3.30pm.
Eimeo Surf Life Saving Club president Ross Gee said they had doused the boy in about 30 litres of vinegar.
"We were there as he exited the water, quickly after that he was semiconscious," he told the Daily Mercury.
"We had a defib on him the whole time, he never lost his pulse, there was shallow breathing.
"We doused him with approximately 30 litres of vinegar, all the vinegar on the beach. After that, I was confident enough to remove all the stingers from his legs and hand."
Vinegar inactivates the jelly's nematocysts, which means the tentacles can be removed.
The beach was later closed.
His death is the third fatal jellyfish sting since 2006. It is the second in just over a year after a 17-year-old boy died near Cape York in February 2021.