The two brothers, aged 15 and 13, and their 15-year-old cousin were found on rocks near the town of Lindos on the island of Rhodes.Â
The accident occurred when a rope holding their parasailing parachute snapped, according to the Greek coastguard.
Two people connected with the speedboat that had been towing the teenagers have been arrested, and the incident is under investigation.
The 13-year-old boy and the 15-year-old girl were killed, while the accident left the older boy in a âserious condition with multiple injuries". He is in hospital in Rhodes.
The accident took place at around midday on Wednesday. Both the man driving the speedboat and the owner of the water sports company have been detained and are due to appear before a public prosecutor on Thursday .
The Greek coastguard spokesperson said: "They were following a speedboat. The rope was cut.
"The boy and the girl were killed and another was heavily injured and brought to hospital.
"It is under investigation about how the rope was cut."
The person who was driving the speedboat contacted the coastguard and the fire department, who recovered the bodies, the spokesperson said.
He said: "The guy who controlled the speedboat and another person were arrested."
Blustery winds had made the trio drift towards the rocks, according to the reports in Greek media outlets.
The teenagers had arrived a few days earlier for a family holiday on the island with their parents and had been staying at local hotel.
The Foreign, Commonwealth & Development Office (FCDO) confirmed it had been in contact with the family.