It happened around 9 p.m. in the Berkeley Township bay area. Officials say the children were on the boat with their grandparents.
Police say a 30-foot vessel struck an Intercoastal Waterway channel marker.
The impact caused a 9-year-old girl and a 7-year-old boy to be ejected into the water.
A 63-year-old man and a 64-year-old woman in the boat searched the water and found their grandchildren unresponsive.
The children were taken to a local hospital where they were pronounced dead.
Councilman James Byrnes said he did see a life jacket next to one of the children while the child was receiving CPR.
Officials say all the lights on the channel marker were working and on at the time of the incident.
The crash remains under investigation.
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