The victims who were identified as a German holidaymaker and a Czech woman living in Tarifa, were spotted struggling in the waves off Los Lances beach on Sunday evening at around 6pm.
Onlookers called emergency services but before they even arrived, fellow kitesurfers had pulled them both from the water.
Attempts to resuscitate them failed and they were pronounced dead by paramedics at the beach.
On Monday the town hall in Tarifa flew its flags at half mast.
Francisco Ruiz, the mayor of Tarifa, a town at Spain's southwestern tip that is hugely popular with kite-surfers, said the pair were likely dragged out to sea in strong currents.
"Eyewitness accounts point to the likelihood that they were dragged out to sea by strong currents at the mouth of the Jara river as they were trying to reach the shore," he said to local media.
"In areas such as that at the river mouth the confluence of strong currents can be very dangerous," he said.