The third stage of labor involves the delivery of the placenta, which is the structure that nourished the fetus during pregnancy. After the baby is born, uterine contractions cause the placenta to detach from the uterine wall and be expelled through the birth canal. This stage is crucial to prevent postpartum hemorrhage by ensuring the uterus contracts properly and the entire placenta is delivered intact. The amniotic sac typically ruptures earlier in labor, and the umbilical cord is clamped and cut after the baby is delivered but before placental expulsion. Fetal membranes are part of the placenta complex and also are delivered during this stage.

Reference: Williams Obstetrics, Cunningham et al., 25th Edition.