Andrew Chan, 22, and Myuran Sukumaran, 24, who masterminded the trafficking of 8kg of heroin to Australia, showed little emotion as the sentences were read out in a packed courtroom on the Indonesian resort island.
Yesterday's court proceedings were broadcast live in Australia, where drug trials involving its citizens in Indonesia have triggered intense public interest.
John Howard, the Australian prime minister, whose government opposes capital punishment, said the sentences were predictable, given the "weight of the evidence".
"I feel desperately sorry for the parents of these people, I do," he told reporters in Canberra. "But the warnings have been there for decades, and how on earth any young Australian can be so stupid as to take the risk is completely beyond me."
A panel of three judges found Chan guilty of "exporting heroin in an organised ring" and accused him of "damaging Bali's international reputation".
Later, judges found Sukumaran guilty of involvement in an organised drug ring and said he, too, would face a firing squad.
Police escorted the two men, both of whom are from Sydney, out of the courtroom in handcuffs, pushing past hundreds of reporters and television crews, and into a prison van.
Four other members of the so-called Bali Nine, all of them Australians, were jailed for life earlier this week. The sentences for the final three are expected today.
Some members of the ring were arrested at Bali's airport with heroin taped to their bodies, while others were in a hotel room, purportedly plotting another shipment.
A spokesman for Susilo Bambang Yudhoyono, Indonesia's president, said: "The signal that should be understood and heard by the Australian people and drug traffickers abroad is: if you go to Indonesia, don't bring illegal drugs."
There have been several drug cases involving Australians overseas in recent months, including that of Nguyen Tuong Van, who was executed in Singapore in December after he was found guilty of heroin smuggling.
The Australian government routinely pleads for death sentences passed on its citizens by foreign courts to be commuted to time in prison.
Mr Howard said that while he "would take appropriate action" to help members of the Bali smuggling ring, "you cannot expect the Australian government to overturn the laws of another country".