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The crash occurred in the Nichupté Lagoon off the coast of Cancún in the south-east of the country at approximately 3.30pm yesterday (30 March).
Footage was recorded by guests on a nearby boat, who were attending a couple's gender reveal party, according to Milenio.
The plane had performed a number of tricks and crowds cheered as a banner trailing the plane revealed that the baby was a girl.
However, the cheers quickly turned into screams as the plane nosedived into the sea.
Emergency services arrived at the scene and recovered the pilot and the co-pilot from the water, but one died during the rescue and the other was declared dead while receiving first aid on dry land, according to local media.
The federal civil aviation agency has opened an investigation into the incident.
In February, a man in the US state of Michigan died after a gender reveal party trick went horribly wrong.
The 26-year-old was standing near a small cannon when it blew up, according to 7News.
The explosion sent shrapnel flying and the victim was struck by metal and rushed to Hurley Medical Center in Flint in a serious condition. Sadly, medics weren't able to save the young man's life.
Many gender reveal parties aiming for the spectacular have ended badly in recent times, with one causing millions of dollars in damage.
A 'pyrotechnic device' used for a photo opportunity at a gender reveal party last year sparked a wildfire in California that destroyed more than 7,000 acres of land.
The California Department of Forestry and Fire Protection said the fire was sparked by a device that pumps out coloured smoke.
Pyrotechnic machines are often used to release pink or blue smoke so that expecting parents can announce the gender of their new child to family and friends.
The fire was exacerbated by a record-breaking heatwave that was crippling the state.
The woman who claims to have started the gender reveal trend subsequently begged people to stop.
After hearing that the destructive blaze began during a gender reveal party, Jenna Karvunidis blasted the parents.
In a post to her Facebook page High Gloss and Sauce, the blogger said: "Oh my god NO.
"The fire that evacuated parts of California is from a GENDER REVEAL PARTY.
"Stop it. Stop having these stupid parties. For the love of God, stop burning things down to tell everyone about your kid's penis. No one cares but you.
"It was 116 degrees in Pasadena yesterday and this tool thought it would be smart to light a fire about his kid's d*ck. Toxic masculinity is men thinking they need to explode something because simply enjoying a baby party is for sissies."
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