Four men aged 22 to 45 "were found dead after the tunnel they were working in was flooded nine days ago by the Egyptian army", local authorities in the city of Rafah near Egypt's border said in a statement.
Egypt had not confirmed the information, though it has destroyed hundreds of tunnels in the area, alleging they are used to transport arms and militants.
Gazans use such tunnels to smuggle goods into the Palestinian enclave, which is run by Islamist movement Hamas and has been under an Israeli blockade for a decade.
Separately, Hamas's armed wing, the Ezzedine al-Qassam Brigades, said today that one of its fighters was killed while working in a "resistance" tunnel.
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It did not provide further details, including whether the tunnel had collapsed, though the term resistance tunnels is used to refer to those dug for military purposes.
While the tunnels into Egypt have been dug for smuggling, Gazan tunnels into Israel have been used for attacks, particularly in the 2014 war between the two sides.
Gazans allege Egypt has carried out work to flood the area along its border to destroy tunnels into its Sinai Peninsula, where Egyptian security forces are also fighting Islamic State-linked jihadists.