More than 200 people were also wounded, many of them seriously, by the explosions in a narrow shopping street in the Burj al-Barajneh neighbourhood that is a bastion of the Shi’ite Hezbollah movement.
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The Lebanese government has declared Friday a day of national mourning.
It is the deadliest bombing in Beirut since the civil war ended 25 years ago.
The U.S. Embassy in Beirut issued a statement saying that the United States “strongly condemns heinous attack” and that officials extended “condolences to victims’ families, wish speedy recovery to wounded”.
Former Lebanese premier Saad Hariri, who leads a political bloc opposed to Hezbollah and its allies, called the attack “vile and unjustified”.
An hour later, ambulance sirens could still be heard in Beirut streets.
Health Minister Wael Abu Faour said 43 people were killed and 240 people were wounded. The third suicide bomber died before he could even detonate the bomb in his vest.
The body of a third bomber who failed to detonate his explosives was found at the scene of the second blast.
An IS statement – which could not be independently verified – said that its “soldiers of the Caliphate” detonated explosives which were concealed on a motorbike.
At least 971 Hezbollah fighters have been killed in Syria, according to the Britain-based Syrian Observatory for Human Rights monitor.
Hezbollah has in turn accused IS of targeting innocent civilians, including unarmed people and the elderly.
Hezbollah said the bombing as “a Satanic terrorist act, carried out by apostates”.
“What happened here is a crime… this battle against terrorists will continue and it is a long war between us”, said Hussein Khalil, an assistant to the group’s leader, Seyyed Hassan Nasrallah.
Hospitals in southern Beirut called on people to donate blood and appealed on residents not to gather at hospital gates so that ambulanced and emergency staff could work unhindered.
Witnesses described a hellish scene in the aftermath of the blasts which took place minutes apart from each other.
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The explosions were the first attacks in more than a year to target a Hezbollah stronghold in Lebanon, as the Iran-backed group steps up its involvement in the war in neighbouring Syria. The blasts appeared to mark a return to a campaign of attacks that targeted the group’s strongholds between 2013 and 2014, ostensibly in revenge for its military support for Syrian President Bashar al-Assad.
