The pair, aged 53 and 58, were Marion Elizabeth Graham and Kathy Dinsmore from the Newry area.
The Turkish teen being held by police is understood be the boyfriend of a daughter of one of the victims.
It is believed he has confessed to the attack and is expected to be brought before a judge in Turkey on Friday evening for a preliminary hearing.
Two other men, one who is understood to be the teenager's father and another believed to be a taxi driver, are also said to be helping police with their enquiries.
Media reports in Turkey suggest police are investigating claims that the girl's mother had refused to allow the young couple to marry, as one line of enquiry.
The bodies of the women were found in a forest, just outside the city of Izmir - about 75 miles from the resort of Kusadasi.
It is understood one of the victims owned a property in Kusadasi, but that the women had travelled to Izmir.
This is every family's nightmare and the whole area is in grief that something so awful has happened.Margaret Ritchie, SDLP
A local source told UTV the two women had been taken to a wooded area and stabbed to death - they were later reported as missing from their resort by one of their daughters.
The source explained that it's believed the daughter had been sent on a boat trip, while her boyfriend took the two women on a shopping trip - at this point, reports suggest he took them to the forest where their bodies were found.
"In the five years I've been reporting out of Turkey, we've never covered the murder of a foreign person," the source told UTV.
"The Turkish population always gets on really well with foreign tourists coming into the country - they are very surprised at what has occurred."
A spokesman for the Department of Foreign Affairs in Dublin told UTV that consular staff are in the process of contacting family members.
SDLP leader and South Down MP Margaret Ritchie said people in her constituency have been left shocked and saddened by the murder of two local women.
"On behalf of the SDLP, I want to express my heartfelt condolences to the families of the two women who lost their lives in such a brutal, ghastly way," she said.
Sinn Féin MLA for Newry, Mickey Brady sent his condolences to the relatives following the shocking news.
"Such tragedy should never be visited on a family and to think that two families from this area will be plunged into such despair and sadness is terrible," he said.
DUP MLA Jim Wells also expressed his sadness over the murders and said: "I've been on holidays to this area and it's relatively peaceful and safe - this makes it even more tragic."
Ulster Unionist MLA for Newry and Armagh, Danny Kennedy said he was "shocked at the horrific events".
"This is simply awful news which will cause a great deal of shock and sadness in the local community," he said.
"On behalf of the Ulster Unionist party I would like to extend my deepest sympathies to the families at this awful time and to offer any support and assistance which they may require."
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