The 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 Gazan 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 run by Islamist movement Hamas and under an Israeli blockade for a decade.
While the tunnels into Egypt have been used 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 the Sinai, where Egyptian security forces are also fighting Islamic State- linked jihadists.
In recent months, at least 20 Gazans have died in both militant and smuggling tunnels in the strip of some two million people. A number of militant tunnels have collapsed in recent months.
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