The Police National Dive Squad found the body at 3.30pm yesterday, not far from where the man went missing.
The Police National Dive Squad searched the lake yesterday afternoon and were assisted by the harbourmaster.
A shoreline search was also carried out on the island.
Queenstown Lakes Mayor Jim Boult said yesterday it was terrible when things like this happened in the district.
"Everybody, I'm sure, is thinking about him and his family," Boult said.
Area response manager Senior Sergeant Allan Grindell said on Friday that the man was on Stevensons Island when he swam out to retrieve a drifting boat but then got into trouble.
Another person swam out to help him but that person wasn't able to locate him, he said.
LandSAR volunteers also helped look for the man.