The children were in the surf on a beach near Sagres, about 200 kilometers (120 miles) south of Lisbon, when they were caught by a strong current Monday, daily paper Diario de Noticias reported.
The tourists, all said to be aged between 40 and 50, went into the water and managed to push the children back to shore, the paper said.
However, the adults were then reportedly trapped by the current and strong waves. One died in the sea and three others on the beach where emergency services attempted to resuscitate them, according to the paper.
The British embassy in Lisbon confirmed three British tourists had died and that three others required medical treatment but declined to provide further details.
Three other children witnessed the incident from the beach, and all six children were given counseling, Diario de Noticias said.
The relationship between the adults and the children was not clear. Neither local authorities nor embassy officials were immediately available for comment.
Recent hot weather has drawn many people to Portugal's beaches, but autumn tides are notoriously dangerous.