Capitolio Canyons is a popular tourist destination in Minas Gerais state. Viral videos of the incident on social media showed a tower of rocks breaking away from the cliff wall and came crashing down on two boats, sending out a huge wave over the lake.
Three people were still missing after others feared lost were located by telephone, Reuters quoted local authorities as saying.
The injured were taken to local hospitals in the area. Many had broken bones and one person was in serious condition in hospital with head and facial injuries. At least 23 others were treated for light injuries, authorities told Reuters.
The Brazilian Navy said it would open an inquiry to investigate the circumstances of the accident, according to OTempo news.
The region has been under heavy rainfall for two weeks, which could have loosened the rock face.
One video taken at the scene showed a gathering of small boats moving slowly near the sheer rock cliff on Furnas Lake when a huge crack appeared in the rock and a huge piece crashed directly onto two of the boats apparently killing most on board including children.
Another video posted on social media shows the minute before the fall, in which several people warn that "lots of stones are falling" and yell at the occupants of the other boats to move away from the wall.
President Jair Bolsonaro retweeted some of these videos on his account, and reported that "as soon as the unfortunate disaster occurred, the Brazilian navy moved to the site to rescue victims and transport the injured."
The towering slab of rock crashed onto the pleasure boaters drifting near a waterfall on the Brazilian lake.
Minas Gerais fire department commander Edgard Estevo told a news conference that officials were seeking to identify the victims. Another nine people suffered serious injuries.
Video images showed a gathering of small boats moving slowly near the sheer cliff on Furnas Lake when a fissure appeared in the rock and a huge piece toppled directly on to at least two of the vessels.
UPDATESix people died, several were injured, and 20 are still missing after a massive rock formation fell on three boats in the Brazilian state of Minas Gerais on Saturday, officials said.
Estevo said the accident occurred between the towns of Sao Jose da Barra and Capitolio, from which the boats had left.
The press office of Minas Gerais state told the Associated Press that the fire department had deployed divers and helicopters to help. Minas Gerais governor Romeu Zema sent messages of solidarity with the victims via social media.
Furnas Lake, called the "sea of Minas", is a popular tourist draw in the area roughly 420km (260 miles) north of São Paulo.
The state of Minas Gerais has been experiencing heavy rains that have forced almost 17,000 people out of their homes due to flooding, according to the state civil defence.
Officials suggested that the earlier rains could have contributed to the wall coming loose.
The Brazilian Navy, which also helped in the rescue, said it would investigate the causes of the accident.
A video circulating on social media, which has been verified by Brazilian authorities, shows the exact moment when one of the rocks hits the boats.
According to the Brazilian news portal G1, firefighters in the neighboring city or Piumhi say that a sudden downpour dislocated the rocks and made them fall from a height of more than 16 feet.
Besides the confirmed fatalities, at least 15 people were injured during the tragedy, some of them critically, officials said.
Captain Daniel Henrique Alves de Oliveira told a Brazilian news show Saturday afternoon that more deaths are expected.
It's estimated that each boat was carrying between 12 to 20 people, including children.
Victims were transported to nearby hospitals. Pedro Aihara, a spokesperson for the local fire department, said that 32 people were taken to local hospitals with minor injuries. Among those, 27 have already been discharged.