Police said the pupils at a primary school in northern Tasmania were celebrating the last week of classes before the Christmas break when they were thrown from a height of about 10 metres (33 feet).
“Tragically, I can confirm that there are two deceased children,” Tasmania Police Commander Debbie Williams said.
Several rescue helicopters and ambulances were sent to the scene.
Local media showed images of police officers in tears, as blue tarpaulin sheets shielded what Williams said was “a very confronting and distressing scene”.
Prime Minister Scott Morrison said the incident was “just shattering” and “unthinkably heartbreaking”.
“Young children on a fun day out, together with their families and it turns to such horrific tragedy, at this time of year, it just breaks your heart,” he said.
“I just want to say, to the parents and families and friends, all who were there, to the other young children there and witnessing these events, I just pray you’ll have great family around you and great friends and you can come through this horrific tragedy.”
The school had invited parents to volunteer for the event, which featured a wet play zone, a slide, an arts and crafts area and the bouncy castle.
“The purpose for the day is to celebrate a successful year and enjoy some fun activities with classmates,” the school, Hillcrest Primary, posted on its Facebook site.
That post was followed by the update: “There has been an accident on site at our school. We are closing the school for the rest of the day.”
