Prison Break Is Sara Really Dead [exclusive] -

The decision to kill Sara was primarily driven by real-world factors rather than purely creative ones:

Horrified by the sight, Lincoln never closely inspected the head to verify it was actually Sara.

The Season 4 premiere revealed that Sara had actually escaped from Gretchen's custody. The explanation for the previous season's evidence was that:

Gretchen used a lookalike cadaver's head to maintain leverage over Michael and Lincoln.

Because they could not agree on a filming schedule, the writers decided to "jolt" the series by killing her character off-screen. They used body doubles for her brief "appearances" in Season 3, which is why her face was never clearly shown.