The 36-year-old named as Rubén Pérez Ayala, who was ordained a priest last June, was one of the 11 people who were injured during Wednesday's blast in the La Latina district.
He died in hospital in the early hours of Thursday, the Madrid archdiocese said in a statement.
Ampliamos: esta madrugada ha muerto el joven sacerdote Rubén Pérez Ayala, trasladado al hospital por las heridas producidas por la explosión de La Paloma. Fue ordenado el pasado mes de junio https://t.co/iaQGBU3uyi
— Archidiócesis de Madrid (@archimadrid) January 21, 2021
The building belonging to the Church of the Virgin de la Paloma and San Pedro el Real located next-door, was completely destroyed in the blast.
Also killed in the blast was an electrician who was working on the building's boiler on the fifth floor. He was named as father of four David Santos Muñoz, 35, a parishioner who offered to help out at the church property which was used as accomodation for priests as well as meeting rooms and Caritas, the church charity that helps the poor.
Hay un sacerdote grave en el hospital y entre los fallecidos se encuentra David Santos Muñoz, electricista de 35 años, padre de cuatro niños, y feligrés de la parroquia que había ido a echar una mano ?DEP pic.twitter.com/cjHAVLdMxS
— Antonio Lola (@AntonioLola4) January 20, 2021
The other two mortal victims were two men who later identified as a carpenter working nearby who was killed as he walked in the street below just as the blast occured and a Bulgarian national who was in the building visiting the church charity.
Javier Gandía Sepulveda, a 45-year old carpenter and father of two from La Puebla de Almoradiel, a small town inToledo province.
La Puebla de Almoradiel llora la muerte de Javier en la explosión de Madrid https://t.co/gunau0KHuK a través de @AhoraCLM
— Ahoraclm (@ahoraclm) January 21, 2021
Stefko Ivanov, 46, who is thought to have been visitng Caritas, the Catholic Church charity which operated at 98 Calle de Toledo he had been living in Spain for 15 years and was a resident of Fuenlabrada.
Neighbours reported a strong smell of gas in the minutes before the blast.
Desplegados en la calle Toledo más de 120 agentes especializados de Policía Nacional: UIP, UPR, TEDAX, Subsuelo, SMA, Policía Científica, Seguridad Ciudadana, Información y Guías Caninos.
Se continúa trabajando en el aseguramiento del lugar#Madrid #Explosión pic.twitter.com/3g6SnbngHb
— Policía Nacional (@policia) January 20, 2021
Despite the force of the explosion, no one was hurt in the elderly care home next door, nor in an adjacent school where tonnes of debris fell into the playground while the children were in class.
At least 15 cars were destroyed in the area.