The 14th stage of the World Rally Championship event was cancelled following the fatal accident involving a Dutch pairing driving an historic car.
A statement from the organisers read: "It is with great sadness that the organiser can confirm an accident took place at the Arena Panzerplatte involving a historic car participating in a non-competitive demonstration programme.
"The car, driven by a Dutch pairing, left the route near the Gina crest. The emergency services were on the scene immediately to assist but despite their best efforts the injuries sustained by both the driver and passenger proved fatal.
"No one else was involved in the incident.
"Everyone associated with the event extends their deepest sympathies and condolences to the families, friends and individuals who are being touched by today's [Saturday] terrible tragedy."
The organisers confirmed that the 14th and final scheduled stage of day three had been cancelled but that the rally "will continue on Sunday according to its itinerary".
Prior to the tragedy, Citroen's Sordo had taken the rally lead following the 13th stage on the second Peterberg test.
That success left the Spaniard, who is looking for a maiden victory having started 106 World Rally Championship races, with a narrow 0.8secs advantage over Belgian Thierry Neuville heading into the final day on Sunday.
Neuville is joint second in the overall WRC standings alongside Finland's Jari-Matti Latvala on 91 points, although they are well adrift of runaway leaders Sebastien Ogier's tally of 181 points.
Ogier could have clinched the title this weekend but the Frenchman made an early exit from the Rally of Germany - the ninth round of the series - on Friday.