An American Navy officer involved in a car crash in which an Ipswich woman was killed will be dealt with under US law.

Narelle Dobinson, 60, sustained serious head injuries when her bicycle was hit by a car at Willowbank, west of Brisbane, in July.

She died in hospital one week later.

Queensland Police had charged a US Navy officer with dangerous operation of a vehicle causing death.

Federal Attorney-General Robert McClelland found the accident occurred while the officer was taking part in official duties.

Mr McClelland says the case will now be investigated by the United States government in accordance with international law.

He says the US has provided assurances that if criminal wrongdoing is uncovered, the officer would face serious charges with penalties comparable to those applied in Australia.