Members of the public and emergency services attempted to save two people when a car crashed into the river in Chapel St Leonards.
A second person has now died following the collision, Lincolnshire Police have confirmed.
Investigating officers have issued an appeal to witnesses of the tragic crash and anyone with dash cam footage to come forward.
A 21-year-old woman, who was also in the car at the time of the crash, was taken to hospital, but died in the hours following.
The incident, involving a white Fiat Punto, happened at around 3.22pm on Monday, February 24.
The car entered the water on Sea Lane, near to the primary school.
There were no other people in the vehicle.
Sea Road and Skegness Road were both closed following the incident.
Lincolnshire Police have asked anyone who was in the area at the time to contact 101 quoting incident number 263 of February 24.