Background: The ongoing outbreak of SARS-CoV-2 represents a significant challenge to international health. Several reports have highlighted the importance of ACE2 on the pathogenesis of COVID-19. The spike protein of SARS-CoV-2 efficiently binds to the angiotensin-converting enzyme 2 (ACE2) receptors and facilitates virus entry into the host cell. In the present study, we hypothesize that a functional insertion/deletion polymorphism-rs4646994 I/D and rs4240157 T > C in the ACE gene could be associated with SARS-CoV-2 infection and mortality. Methodology: This study included 117 consecutive COVID-19 patients and 150 age matched healthy controls (ACE2-rs4646994 I/D) and 100 age matched healthy controls with ACE2 rs4240157 T > C. We used Mutation specific PCR (MSP) for ACE2-rs4646994 I/D genotyping and amplification refractory mutation system (ARMS-PCR) for ACE2 rs4240157 T > C genotyping. Results: Results indicated that there were significant differences in the genotype distributions of ACE2-rs4646994 I/D polymorphisms (p < 0.030) and ACE2 rs4240157 T > C between COVID-19 patients and controls (p-values < 0.05). Higher frequency of DD genotype (48.71%) and D allele (0.67) was reported in COVID-19 patients than controls. Our results showed that the ACE2-DD genotype was strongly associated with increased COVID-19 severity (OR 2.37 (95%) CI = (1.19–4.70), RR = 1.39 (1.09–1.77), p < 0.013) and also a strong association was seen with ACE2-ID genotype with COVID-19 severity (OR 2.20 (95%) CI = (1.08–4.46), p < 0.020) in the codominant model. In allelic comparison, the D allele was strongly associated with COVID-19 severity (OR 1.58 (95% CI) (1.11–2.27), RR 1.21 (1.05–1.41) p < 0.010). A significant correlation of ACE2-I/D genotypes was reported with Age (p < 0.035), T2D (p < 0.0013), hypertension (p < 0.0031) and coronary artery disease (p < 0.0001). Our results indicated ACE2-DD genotype was strongly associated with increased COVID-19 mortality (OR 8.25 (95%) CI = (2.40 to 28.34), p < 0.008) and also ACE2-DD + DI genotype was strongly associated with increased COVID-19 mortality with OR 4.74 (95%) CI = (1.5214 to 14.7915), p < 0.007. A significant correlation was reported between COVID-19 patients and age matched controls (p < 0.0007). Higher frequency of heterozygosity TC (40%) followed by ACE2-CC genotype (24.78%) was reported among COVID-19 patients. Using multivariate analysis, ACE2–CT genotype was strong associated with SARS-CoV-2 severity with an OR 2.18 (95% CI) (1.92–3.99), p < 0.010 and also ACE2–CC genotype was linked with COVID-19 severity with an OR 2.66 (95% CI) (1.53–4.62), p < 0.005. A significant correlation of ACE2-T > C genotypes was reported with gender (p < 0.04), T2D (p < 0.035). ACE2-CC genotype was strongly associated with increased COVID-19 mortality OR 3.66 (95%) CI = (1.34 to 9.97), p < 0.011 and also ACE2-C allele was associated with COVID-19 mortality OR 2, 01 (1.1761–3.45), p < 0.010. Conclusions: It is concluded that ACE-DD genotype and D allele was strongly associated with increased COVID-19 patient severity. In addition, ACE I/D polymorphism were strongly associated with advanced age, diabetes and ischemic heart disease in COVID-19 patients whereas ACE-II genotype was a protective factor against the development of severe COVID-19. ACE2-DD genotype was strongly associated with increased COVID-19 mortality. Additionally, ACE2–CC and CT genotypes were strongly associated with COVID-19 severity. Therefore, our study might be useful for identifying the susceptible population groups for targeted interventions and for making relevant public health policy decisions.