A crane collapsed at the ground which will host the tournament's first game in Sao Paulo.
The incident occurred on Thursday, damaging three huge metallic parts of the ground and destroying part of the stadium's structure.
The Military Police confirmed that two people had died in the incident, though the exact number of casualties and wounded remains unclear. It is reported that a third person is hospitalized in serious condition.
Corinthians, whose new ground was said to have been 94 percent complete earlier in November, have expressed their sympathy over the incident in a club statement, saying, "The board of Sport Club Corinthians Paulista deeply regrets the accident earlier in Corinthians Arena."
The Sao Paulo fire department is currently looking for survivors and wounded in the Itaquerao, with work suspended. A witness said most workers were on a lunch break at the time of the incident.
"I was a little far from the place of the accident, but what I know is that that would've been the last piece to be installed in the stadium structure," a bystander told Goal Brazil's Fernando Ahuvia. "We were lucky that several workers weren't there at the moment, because it happened during lunch break."
The stadium was intended to host the opening game of next summer's World Cup, though Thursday's accident could cast its completion in time for the tournament into doubt.
This is the third fatal incident in the building of World Cup 2014 stadia - the first at the Estadio Nacional Mane Garrincha in June 2012 and the second in March this year at the Arena Amazonia, which both involved a worker falling from a height.