Post-mortem examinations are due to be carried out on the bodies of the 62-year-old woman, and her brother who was 50, who both drowned in the incident.
He has been named locally as Dessie Byrne, and his sister, Muriel Eriksson, is believed to have travelled home from Malmo, Sweden, where she lived and worked.
It has been reported that Mr Byrne, who is originally from Athlone, lived in the village of Lecarrow with his wife and their other children.
His son is understood to have been on the beach at the time and witnessed the tragedy unfolding.
Local Sinn Féin Councillor in Ballybunion, Robert Beasley, said he understood that the woman had been visiting her brother in Roscommon before both travelled to Ballybunion.
“This would be a very popular spot for people from the midlands, such as Roscommon to visit, he said.
Cllr Beasley who had driven close to the spot less than an hour before the tragedy occurred told Morning Ireland that 800 people were on the beach at the time.
The alarm had been raised by Mr Byrne’s teenage son shortly after 6pm when the man was washed up on the beach.
Members of Ballybunion Sea and Cliff Rescue and Ballybunion Coast Guard unit began CPR on Mr Byrne but he was pronounced dead a short time later.
A search later recovered his 62-year-old sister, and transferred her to the beach where CPR was also carried out but she too was pronounced dead.
Their bodies were removed to University Hospital Kerry in Tralee where post mortems are due to be carried out.
The Irish Coast Guard helicopter from Shannon, Rescue 115 and the Kilrush lifeboat were also involved in the operation.
They were joined by the Fenit inshore lifeboat and the Community Air Ambulance from Mill Street in Co Cork.
The operation was directed from the Marine Rescue Coordination Centre in Valentia.
Irish Coast Guard Operations Manager Michael O'Toole said they received notification of two people in difficulty at Ballybunion beach just after 6pm yesterday and a large scale search was immediately initiated by the Maritime Coordination Centre at Valentia.
Speaking on RTÉ's Morning Ireland, he said: "Unfortunately there was a tragic outcome to the operation...our thoughts must be with the family and friends of those affected by this incident".
Mr O'Toole said it is understood that the two people who died were involved in swimming based activities and that gardaí are conducting an investigation into the overall circumstances around their deaths.