NSW Health confirmed the two men died after leaving the Knockout Outdoor festival at Sydney Showground on Saturday and police said they were waiting for autopsy reports, amid speculation the men died after taking illicit drugs.
Paramedics attempted to revive a 26-year-old man outside the venue on Sydney Olympic Boulevard before he was rushed to Concord Hospital, where he died.
The other man, a 21-year-old, was treated by paramedics at a Sydney CBD hotel before being transferred to hospital, where he also died.
Police are investigating the cause of both deaths and will prepare a report for the coroner but were unable to confirm if the men had consumed drugs.
"It's not specifically being treated as a suspected drug overdose," Detective Superintendent Simon Glasser told reporters outside Auburn Police Station on Sunday.
"We look at all avenues.
"Anything could have happened."
But Det Supt Glasser said it showed people could die at music festivals and drugs could have "horrible consequences", especially when mixed with heat after Sydney sweltered through unseasonably warm conditions on Saturday.
"These events (are) for people to go and enjoy some music and have a lot of fun with mates, so it's tragic that people have lost their lives," he said.
Nine other people were urgently taken to hospital from Knockout Outdoor and one from the Listen Out music festival at Centennial Park in the city.
So far no one has been taken to hospital from the five-day Dragon Dreaming festival at Wee Jasper, about 90km northwest of Canberra.
NSW Health said it was committed to working closely with music festival organisers to support a safe industry.
"A range of harm reduction initiatives were in place at these festivals, including, support and health promotion workers, health messaging, free water, chill-out spaces and well-equipped medical services," a NSW Health spokesperson said.
A crowd of about 27,500 packed into Giants Stadium and its surrounds for Knockout Outdoor and another 53,000 people flocked to Listen Out, in what is considered the start of the festival season.
The Australian Festival Association said on Sunday it was "saddened" to hear of the two deaths.
"We send our sincere condolences to the friends and family of them both," it said in a statement.
It said the organisers of Knockout Outdoor were not members of the association.
At Listen Out, illegal drugs were allegedly found on 85 festival-goers, 37 of whom were issued court attendance notices.
Another eight festival-goers were charged with supplying a prohibited drug, two were arrested for assaulting police, one for wilful and obscene exposure and another with breaching bail.
Twenty-seven others at Knockout Outdoor were charged with illegal drug possession and another four with supplying a prohibited drug.
In one instance, a 26-year-old man who initially ran from police was found with 491 MDMA pills, four grams of cocaine and cash after a positive drug detection by a sniffer dog.
It comes after the Greens released NSW Police search figures showing sniffer dogs scored an average drug detection success rate of just 25 per cent in the past decade.
In NSW, officers can undertake either general or strip searches if they have a reasonable suspicion of illicit drug possession.
But drug dog detection does not entitle police to routinely conduct a search, with officers required to ask follow-up questions such as whether a person is in possession of banned drugs.
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