The men, 21 and 23, went missing at the peak of the flooding on Monday morning and were found in a large open drain near a library in the suburb of Aitkenvale.
Locals said the pair seemed to have been sucked into man-sized pipes that lead to the drain from a liquor store where an attempted looting had been reported.
Police say the bodies have been identified and their families notified.
The news comes amid tentative signs of an end in sight for the flood-stricken city where victims were contemplating their losses and the long, messy clean-up ahead.
Residents have been told not to try to return to their sodden homes until authorities tell them it's safe to do so, but it doesn't stop them looking.
Steve Knight was scraping thick grey silt from his driveway while his wife Rachel picked through what's left of their home.
"It's all material stuff, we can replace things, but to get in and open the door and see everything gone - it was just devastating," he told AAP.
The Bruce Highway reopened on Tuesday, allowing a backlog of trucks to head for the city carrying much needed supplies of fruit, vegetables and other supplies.
Planning for the city's recovery is well under way, despite more rain expected on Tuesday night and ongoing concerns about more flash flooding.
"It's too early to say we're moving towards recovery, the area remains under a severe weather warning and more heavy rain is possible tonight," a City of Townsville spokesman told AAP.
Queensland Fire and Emergency Services Commissioner Katarina Carroll says it is impossible to know how many homes have gone under across the city.
"It's easily hundreds, it could be thousands," she said, but added audit teams were being hampered by the enduring risk of flash floods hitting with each new deluge.
Prime Minister Scott Morrison met flood victims on Tuesday morning, and said he felt for the community.
"A lot of young families, they've worked so hard to get themselves into these homes and to see them just damaged so badly, it must just be heartbreaking," he said.
More than 1000 people were in evacuation centres across Townsville on Tuesday and an unknown number were staying with friends or family.
The monsoon trough that has delivered disaster to Townsville has also generated floods out west, with farmers around Cloncurry, McKinlay and Flinders shire reporting livestock losses.
More 100km inland from Townsville, locals have been warned the Burdekin River at Sellheim may reach close to 19 metres late pm Tuesday.
Premier Annastacia Palaszczuk has ordered her agriculture minister to consult western mayors about help for farmers.
"We've got a long way to go. I'm asking for people to have patience," she said.
