Lovell, from Southampton, was thrown from his boat during the national powerboat racing championship event in Dorset. Lovell is understood to have died in the early hours of Monday morning.
His navigator Dan Whapples, also from Southampton, was also seriously injured in the crash. He is in a serious but stable condition in hospital.
"Following a powerboat incident in Weymouth yesterday, Mike Lovell and Dan Whapples both sustained serious injuries and were air-lifted to Southampton General Hospital," P1 SuperStock, the official championship, said on its website.
British powerboat racer killed
15/07/2012 AT 08:56
"Overnight Mike Lovell sadly succumbed to his injuries. Dan Whapples is in a serious but stable condition. A further statement will be issued when more details are available.
"Our thoughts are with the whole powerboat community and particularly with Mike and Dan's family and friends."
The BBC reported that their boat barrel-rolled, with both men thrown clear of the Peters and May team boat.
After the accident on Sunday a spokesman for the Coastguard said: "The casualties were recovered from the water and to enable a quick transfer to hospital, the most severely injured casualty was taken aboard the Weymouth RNLI lifeboat and winched by the Portland Coastguard Rescue Helicopter to fly onwards to Southampton General Hospital.
"The second casualty was transferred to Southampton General Hospital by the Dorset and Somerset Air Ambulance Helimed 10."
Organisers of the P1 SuperStock UK Championship cancelled the race after the crash.
Lovell is the second British powerboat fatality this year, following the death of William Nocker in a high-speed crash at the Gabon Grand Prix in Africa.