Christine Foster, 26, an Australian who had just begun a working holiday, died after being hit by the masonry.
Five other people, tourists from Canada and the Netherlands, were injured in the incident at Ryan's Bar just off Princes Street in June 2000.
Giving evidence at a fatal accident inquiry, Susan Broussine, 51, a lecturer, said: "I heard what I thought was an explosion then there was lots of things smashing, lots of screaming.
"As I moved away I looked over my shoulder and there was a lady lying on the ground."
Ms Broussine suffered serious bruising after she was struck on the leg by the stonework.
Her friend, fellow lecturer Karen Lawson, was left bleeding after debris struck her on the head.
Another witness, Kenneth Owenson, told the inquiry at Edinburgh Sheriff Court: "Everyone was sitting outside enjoying themselves. It looked a nice place to meet.
'Spinning lead'
"Then suddenly the stones were coming down and one struck a lady in the head and people were falling all over the place.
"I saw lead spinning as it fell down. There was debris over about a five metre radius.
"An old lady was cut on the head and a man was lying on the ground."
The general manager of Ryan's Bar, Hamish Mair, said: "There was a huge noise of masonry crashing down. When the dust settled I ran outside and there was glass and chairs everywhere.
"Christine was lying on the floor."
News vendor Thomas Munroe, 61, told the inquiry that in six years of working opposite the bar at the junction of Princes Street and Hope Street he had never seen or heard of debris falling there.
Ms Foster, from Kalgoolie in Western Australia, was serving drinks when the accident happened.
She was a civil engineer by profession and lived in a shared flat in Edinburgh.
Her father Michael is attending the inquiry, which is expected to last two weeks.
The main issues to be examined are expected to include the specific cause to how traffic, pollution and other factors can generally affect older properties.