"It's been confirmed today that there are two deceased persons in Cobargo and a third person remains missing with grave concerns for their safety," New South Wales (NSW) Premier Gladys Berejiklian told reporters.
The victims were believed to be a father and son who were attempting to defend their home from an oncoming firefront in the town of Cobargo, in the southeast of the NSW, reports Xinhua news agency.
NSW Police Deputy Commissioner Gary Warboys described the circumstances as "tragic".
"They were obviously trying to do their best with the fire as it came through in the early hours of the morning," Warboys said.
"The other person that we are trying to get to, west of Narooma, we think that person as well was caught up, trying to defend their property in the early hours of the morning."
Responding to the Green Valley fire in Jingellic, NSW, a 28-year-old volunteer firefighter was killed while he and his crew were trying to save livestock that had been trapped in the blaze.
Meanwhile, in Victoria state four people were declared missing and more than 4,000 were cut off as they took shelter on the coast.
Victorian Premier Daniel Andrews said that evacuation plans were being considered for the group by any means possible.
"We've made some requests to the (Australian Defence Force) for their support, both in terms of making damage assessments but also some of these isolated communities can be accessed by sea," Andrews said.
Communities will remain on high alert throughout the night, with around 200,000 hectares ablaze in the East Gippsland region of Victoria.
At least 10 people have been killed from Australia's unprecedented wildfire season, which has destroyed an estimated 1,000 homes.
( With inputs from IANS )