The two flags had been placed on the island last week and had caused much local controversy.
The TheJournal.ie website reports that the man attempted to swim across Bessbrook Pond with the intention of removing the two tricolours and replacing them with the UK's Union flag.
Local SDLP MLA Dominic Bradley told the website: “It would appear that the man attempted to swim across Bessbrook Pond with the intention of removing of two tricolour flags that had been placed on an island there and replace them with a Union flag.
“As a native of Bessbrook, I know the family of the man who drowned this evening and my thoughts and prayers are with them at this very difficult and sad time.”
Sinn Fein politicians had called for the removal of the flags before the tragedy.
MLA Mickey Brady claimed the flags could be seen as intimidating by the Protestant community in the village.
He said: “These flags, some may consider them as overtly sectarian, intimidating and threatening, and I think what we do not want to do in relation to this is perpetuate division.”