UN diplomats confirmed that the attack helicopter and the crew had been supplied by Germany to MINUSMA, the UN mission in Mali.
"Sadly we now know that two Bundeswehr (German army) soldiers have given their lives for our country," German Defence Minister Ursula von der Leyen said in Berlin late on Wednesday.
According to German army Vice Admiral Joachim Georg Ruehle, standing beside her, the helicopter crew did not issue any distress calls and there were no firm indications as to the cause of the crash which happened at around 1220 GMT, 70 kilometres (40 miles) north of the city of Gao.
The army believes the helicopter was the victim of "a massive technical failure," the German magazine Der Spiegel reported.
MINUSMA in a statement confirmed the two UN peacekeepers had been killed and that the crash was thought to have been the result of a mechanical failure.
A UN source in Gao said earlier that nothing at this stage would suggest the aircraft was hit or shot at as it monitored fighting in the area.
The United Nations operation, launched in 2013, is considered the UN's most dangerous peacekeeping mission, with dozens of its staff killed over the last four years.
Helicopter operations suspended
Germany has reinforced its presence in Mali this year, deploying several Tiger combat helicopters and raising the number of Germans serving in MINUSMA to 639 as of June, the army's largest presence overseas.
France has expressed hope its European neighbour will do more in the poor and insecure Sahel region.
Following Wednesday's crash, all helicopter operations have been suspended, Von der Leyen said.
The crash comes two years after two Dutch UN peacekeepers died when their Apache attack helicopter crashed in northern Mali.
Northern Mali is the site of frequent clashes between rival armed groups, as well as a haven for jihadist activity.
Fighting between the Gatia pro-government group and the CMA former rebel alliance close to the city of Kidal claimed numerous victims on Wednesday, a military source within the UN mission said, separate to the clashes near Gao.
A local official accused the rebels of using "jihadist back-up" to gain an advantage over the pro-government fighters.
The groups' disputes threaten the future of a peace deal they signed in 2015 aimed at curbing northern uprisings and keeping the jihadists in check, according to the UN.
MINUSMA chief Mahamat Saleh Annadif said on Wednesday his staff were "devastated by the crash".
"All MINUSMA personnel and myself salute the supreme sacrifice made by peacekeepers," he said in a statement posted on the mission's Facebook page.
In 2012, key cities in Mali's north fell under the control of jihadist groups linked to Al-Qaeda, who exploited an ethnic Tuareg-led rebel uprising.
While the Islamists were largely ousted by a French-led military operation, attacks have continued on UN and French forces, civilians and the Malian army.
Former rebels still control the northern city of Kidal, and fighting between groups previously loyal to the Tuareg rebellion and pro-government militia is common, in violation of a ceasefire.
The United Nations has condemned such violations by the combatants, but the state is absent from much of Mali's northern territory and its terrain is very difficult to traverse.