Many of the victims plunged around 40 feet after part of the third-floor barrier on the stairs leading up to the venue collapsed.
Youngsters were waiting in the Rich Club in San Luis Potosi to see a concert by Kevin Moreno – a well-known Mexican artist – when the tragedy occurred.
Footage showed revellers crashing onto the main square below the nightclub, narrowly missing people walking by outside.
Five of the 16 people hurt are said to have suffered serious injuries.
Jorge Hernandez, the town hall official, said the nightclub had not been permitted to stage a concert.
He added: “The constant and uncontrolled presence of people attending this event caused one of the railings on the third floor of this building to give way under the pressure and lead to this tragedy which claimed the lives of two people.
“There are around 15 injured, some of them seriously.”
Authorities reacted to the tragedy by closing the nightclub while an investigation got underway.
The five people seriously injured remained in intensive care this morning.The two people who lost their lives have been named as Manuel Alejandro Infante Puente, 21, and Rodrigo Espinosa Alonso, 17, known to his friends as Roy.
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