The girls' father, 48, who did not live at the family home, is reportedly receiving counseling for severe shock.
The woman telephoned friends at 1:30 am Saturday, who then notified police and paramedics.
During the phone call, the mother said something bad had happened with the children, aged 3 and 5, according to police in Stade, located near the woman's home in the community of Hammar.
Paramedics found the two children dead in their bedroom. Their mother, who was injured, was arrested but first taken to hospital for treatment. Police would not release information on how the girls were killed but said an autopsy would later reveal the cause of death.
Additional information on a potential motive for the killings would be released early next week by prosecutors in Stade.
Police began their preliminary investigation of the crime scene in the early hours of Saturday. Forensic experts from Hamburg would also be involved in the case.