Seven other people were injured as the city of Dolores was declared an emergency zone. Many of the city's 20,000 population have been left homeless and struggling to cope with the damage.
'The president has ordered the deployment of all the resources in the state to attend to the situation in Dolores,' said Juan Andres Roballo, an official with the Uruguayan president's office.
Roballo said a good part of the population had lost their homes and at least two children were seriously hurt and had been transferred to the capital for treatment.
Fire department spokeswoman Mariela Vivone told Channel 12 television that two of the dead were killed by flying cars carried by the winds.
Photos have emerged from the scene of the horrific tornado, which appears to have wrecked vital infrastructure, buildings and homes.
Residents have now started to try and clean up the remains from the natural disaster, with many people left homeless following the tornado.
Tornadoes are rare in Uruguay, with the country averaging one tornado per 10,000 square miles every five years.
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