American Warren Weinstein and Italian Giovanni Lo Porto were killed in the raid in the border region of Afghanistan and Pakistan.
President Barack Obama described it as a painful loss he profoundly regretted.
Two other Americans thought to be al-Qaeda members were also killed, one of them in the same raid.
Al-Qaeda leader Ahmed Farouq was killed in that operation and Adam Gadahn, once regarded as a spokesman for the militant group, was killed in a separate raid, the White House said.
Unnamed officials told Associated Press the attack that killed the hostages was a CIA drone strike.
Barack Obama, speaking at the White House about the operation that killed the hostages, said the US had launched the raid in the belief the target was an al-Qaeda compound with no civilians present.
As commander-in-chief, the president said, he took “full responsibility” for the operation.
The White House said compensation would be paid to the families of the hostages.
Warren Weinstein’s wife Elaine said in a statement the family was “devastated”.
“Those who took Warren captive over three years ago bear ultimate responsibility,” she added.
Elaine Weinstein thanked several members of the US congress and unnamed officials from the FBI, but said the assistance received from “other elements of the US government was inconsistent and disappointing”.
She also criticized the Pakistani government and military who, she said, treated her husband’s captivity “as more of an annoyance than a priority”.
Barack Obama said the operation was in compliance with the White House’s counterterrorism protocols.
Warren Weinstein, 73, was abducted in Lahore in 2011, where he was working as an aid worker. Giovanni Lo Porto disappeared from Multan, Pakistan in January 2012. Both men were aid workers.
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