The man, whose age and identity was not immediately available, was seen staggering along Portimão riverside early on Sunday morning before falling into the river.
An eyewitness who was eating at a local fast food restaurant saw the youth fall onto rocks that line the river, and reportedly went to call friends to help him but as they rushed back to the spot, they watched in horror as he sank under the water.
Rescue services were called and located the body at 9.30am, around two and a half hours after the youth tumbled into the river.
According to the local port authority the young man was found at a depth of two metres.
Newspaper Correio da Manhã said the body had no identification on it and no one was reported missing within the hours following his death.
His body was taken for autopsy to determine the cause of death.