Bosworth Water Park, in Leicestershire, was closed after police were called at about 15:50 BST on Saturday.
The boy was taken to hospital but later died. A man and woman have been arrested and remain in custody, Leicestershire Police said.
One woman, who was at the park with her daughter, said she had not been there long when she saw CPR being done on a little boy by the side of the water.
Samantha Scott said: "I'm not sure myself how the incident happened, there were a lot of children in the water yesterday, most with adults.
"The water was so murky with all the sand, if anyone had gone under, you wouldn't have been able to see them at all.
"I wouldn't let either of mine go in further than their knees as the water had stones underneath it too and both girls cut their feet. It looked very deep in the middle.
"The first we saw was a gentleman performing CPR, everyone had gone quiet and you could tell we were all listening for a cry or any sign everything was OK.
"The air ambulance arrived but we left just as they flew off."
Another eyewitness, Olivia Quinn, said the scene was "horrific".
"It hasn't left my mind seeing the boy's body on the ground and seeing people try to save him by giving him CPR," said Miss Quinn.
"Everyone was in shock, crying and praying for the little boy. The ambulance took a while to come as it was so busy with people everywhere and cars all around the park.
"It wasn't looking good as it must have been 30 minutes a man was still trying with CPR.
"When I saw the boy's body being moved on the stretcher into the ambulance, I could see paramedics still giving CPR in the ambulance. A few cars followed the ambulance and I was thinking to myself that must be the parents."
Owner Nigel Riley said it was a "dreadful incident" and the park in Market Bosworth reopened on Sunday.
A statement on its Facebook page said: "From all of the staff at Bosworth Water Park we would like to pass on our deepest sympathies to everyone affected by this tragic loss of life."
Police have asked people "not to speculate" about the circumstances of the death.
Any witnesses who may have seen what happened should contact the force, especially if they have any video footage from Saturday of the Blue Lagoon beach area.

The London team has only once before turned a profit in the 10 years since it was acquired by Russian billionaire Roman Abramovich.
The club said a new TV broadcasting deal, as well as the sale of players such as Juan Mata, had boosted profits.
Chelsea are currently unbeaten at the top of the Premier League.
They also top their Champions League group.
In 2012, Chelsea reported a profit of £1.4m, its first under Mr Abramovich. The club then made a loss in 2013.
This year's profits mean the club satisfies the Financial Fair Play (FFP) rules imposed by Uefa, European football's governing body.
Under FFP, clubs need to balance football-related expenditure - transfers and wages - with television and ticket income, plus revenues raised by their commercial departments.
Money spent on stadiums, training facilities, youth development or community projects is exempt.
Bruce Buck, Chelsea's chairman, said the club's focus was first and foremost on the team's performance.
"By reaching the Champions League semi-final and maintaining a challenge in the Premier League until the final week of the season we demonstrated that, while improving our financial figures, we remained competitive in football's toughest club competitions," he said.

Stuart Hyde, ex-chief constable of Cumbria Police, was put into a medically-induced coma and treated for the viral infection.
Mike Pannett, co-director of the 4 Policing consultancy with Mr Hyde, said he was now out of the coma and talking.
He said his family thanked everyone for the messages of love and support which had helped them all "so much".
Mr Hyde retired in 2013 after being suspended twice from the force, investigated and cleared.
A five-year-old boy has died in a suspected drowning at a water park.
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Chelsea Football Club has reported a record profit of £18.4m ($29m) for the year to June 2014 - despite last season's lack of silverware.
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A former top British police officer is out of a coma after contracting meningitis while working in Abu Dhabi.