The incident occurred when the children were distributed 'Prasad' by a girl who returned to the village after appearing in class X examination yesterday, they said.
The 'Prasad' was prepared during Saraswati puja in her school last month, a police officer said.
The children were taken to Baripada hospital with symptoms of food poisoning and two of them died there last night, he said.
The deceased were identified as Durga Singh (5) and Sambhu Naik (5).