The man, named by local police as 23-year-old Conor Lee, is thought to have died following an altercation with a group of men in San Antonio in the early hours of Sunday morning.
Police have now launched an investigation into the death of the man, who was understood to be staying at the Bergatin Hotel around 10 minutes’ walk from where he was killed.
Eyewitnesses told local newspaper The Ibizan the victim was attacked by at least three other young men, who were also thought to be British.
They said the fight followed an argument, although it had been unclear what had initially started the dispute.
A spokesman for the Foreign and Commonwealth Office said it had been made aware of the man’s death.
“Our staff are providing assistance to the family of a British man who has died in Ibiza and are in touch with the local authorities, who are investigating,” a spokesman said in a statement.
The killing is the latest in a string of deaths of British holidaymakers on the Balearic Island so far this summer.
Last week, the body of 24-year-old London business consultant Anwaar Lahrichi-Greenwood was found floating in the water at a marina in San Antonio.
In July, an unnamed British man died after being punched by another tourist at a hotel in the resort.
Earlier that month, a 19-year-old British national drowned in a pool at a private party in the village of Sant Josep.
Additional reporting by PA