More than a thousand people in Panama were evacuated because of what authorities called historic flooding caused by record rainfall.
President Ricardo Martinelli said it was the first time the canal was closed because of weather since it opened in 1914.
"Our meteorologists says it's never rained so much in Panama in the 73 years that we've kept climate records," Martinelli said. He said eight people were dead.
The last time the canal closed was on December 20 1989, when US troops invaded the country to topple President Manuel Noriega.
The country's Civil Protection System put eastern Panama on high alert and issued evacuation orders for about 1,500 people in dozens of flooded neighborhoods.
Authorities recovered the bodies of two girls who were on a boat that capsised in the town of Chepo in the southeast part of the country. The other deaths were reported in the Colon province.
About 50 people in two communities were ordered to leave their homes and residents near the Chagres river were told to be on alert.
The canal was closed after water overflowed the banks of lakes Gatun and Alajuela, which supply the canal. Authorities said they've opened the floodgates for both lakes.
"We're taking measures to normalize transit operations in the coming hours," Manuel Benitez, the executive vice president of canal operations, said Wednesday afternoon.
About 5 per cent of the world's naval commerce moves through the canal, and the US is its main user.
Meteorologists say the heavy rains are part of the La Nina weather phenomenon.