South Yorkshire Police confirmed that the children – boys aged 13 and 14 – died following an incident at a house in Gregg House Lane, Shiregreen, earlier this morning.
They were taken to hospital but were later pronounced dead.
The cause of death has not yet been confirmed.
Four other children, aged 11, 10, three and a baby of seven months, were also taken to hospital, where they remain this afternoon while they receive treatment.
Emergency services were alerted to the incident at 7.30am and there were multiple police cars and ambulances deployed to the scene.
An air ambulance was also scrambled to the city estate and landed in the grounds of Hartley Brook Primary Academy when the alarm was raised.
A police cordon remains in place around the house where the incident occurred and crime scene investigators are at the house.
A 37-year-old man and a 34-year-old woman have been arrested on suspicion of murder in connection and remain in custody.
South Yorkshire Police said residents can expect a ‘significant police presence’ in Shiregreen throughout today as enquiries continue.
Detective Chief Inspector Simon Palmer said: “Detectives and specialist officers remain in the Gregg House Road area carrying out enquiries and we are working hard to ascertain the exact circumstances surrounding this incident.
“We will remain in the area this afternoon and into the evening carrying out enquiries and providing reassurance.
"I appreciate the events of this morning have caused concern locally but I’d like to reassure you that there is no wider risk to the community. We will be providing regular updates when we are able to. If anyone does have concerns, please do not hesitate to speak to an officer in the area.”
The Astrea Academy Trust, which runs Hartley Brook Primary Academy, said: “We were shocked to hear of the incident this morning.
“We can confirm that Hartley Brook children were not involved in the incident and our pupils were not at any point in any danger.”
Anyone with concerns or information should call South Yorkshire Police on 101 or Crimestoppers, anonymously, on 0800 555111 quoting incident number 122 of May 24.