The child was snatched by the alligator as he played at the water's edge on Tuesday night and dragged into a lagoon despite his parents' effort to save him.
Orange County Sheriff Jerry Demings said he and a Catholic priest had informed the family that the boy's body had been recovered near where he vanished and was completely intact.
An autopsy would be carried out, Demings added, but the presumption was that the child was drowned by the alligator.
"It was a tough message to deliver," Demings told a news conference. "Of course the family was distraught, but also I believe somewhat relieved that we were able to find their son ... so that they can come to grips with what has happened."
The alligator was believed to be between 4 and 7 feet (1.2 and 2 meters) long.
Wildlife officials earlier captured and killed five of the reptiles from Seven Seas Lagoon and opened them up to look for traces of the boy. Nick Wiley, head of the Florida Fish and Wildlife Conservation Commission, said it was too early to say whether one of those five might be the culprit.
"There is a good chance we already have the alligator because we focused our efforts in that proximity, in that area where this incident occurred," he said, adding that the probe would focus on results of forensic tests and bite marks on the child's body.
The resort closed its beaches and recreational marinas on Wednesday while search teams scoured the lagoon, a man-made lake reaching 14 feet (4.2 meters) in depth.
The family, on vacation from the Omaha, Nebraska suburb of Elkhorn, were named as Matt and Melissa Graves. Their son was named Lane.
There are signs prohibiting swimming at the lagoon but the boy was grabbed as he was playing at the water's edge while his family relaxed nearby on the shore, authorities said.
The signs did not specifically warn about alligators, a Disney spokeswoman said, adding that the company would review the situation.
The boy's father rushed into the water and suffered minor cuts on his arm as he fought to wrestle his child from the alligator's grasp, said Jeff Williamson, a spokesman for the Orange County Sheriff's Office.
Authorities said the boy's mother tried to rescue him too. A lifeguard on duty also was unable to reach the toddler in time.
Alligators are not uncommon in the Seven Seas Lagoon, Wiley said. Alligators have killed five people in Florida in the last 10 years, according to state data.
Wiley said the wildlife commission works with the resort to remove "nuisance alligators" - classed as those which have lost their fear of humans - whenever they are reported.
Disney has operated in the area for 45 years and never had this type of incident, Demings said.
Upscale resort
The Walt Disney World Resort is the world's most-visited theme park. About 20.5 million people visited the park's Magic Kingdom in 2015, according to the Themed Entertainment Association.
Shares in Walt Disney Co appeared unaffected by the incident, closing down 13 cents at $98.27.
A Walt Disney World Resort spokeswoman said everyone there was devastated by the accident.
Disney Chief Executive Bob Iger issued a statement to express his sympathies "as a parent and a grandparent."
William Lopez, 41, an evangelical pastor from San Francisco, was on vacation with his wife and seven-year-old daughter. He said he thought a path around part of the lagoon should have been fenced off.
"If we have that kind of aggressive animals we should have been safeguarded," Lopez said. "I hope they do something to correct this so that it never happens again. Because we love to come here."
Disney's Grand Floridian Resort & Spa is described by Disney as a lavish property combining Victorian elegance with modern sophistication. Rooms start at $569 per night, according to its website.
Guests can rent motorized boats for cruising and fishing, or a private lakeside cabana. Children aged between 4 and 12 also can embark upon "pirate adventures" on the lagoon.
Jim Hill, a theme park historian who runs a popular Disney fan blog, agreed with Demings the company has been "aggressive" about managing the risk from alligators.
But he said that the attack, combined with other recent bad news in the area, could make people reconsider plans to visit Walt Disney World.
The alligator incident came as Orlando reeled from a gunman killing 49 people at a gay nightclub in the city on Sunday before dying in a shoot-out with police.
The night before that attack, singer Christina Grimmie was shot and killed in Orlando, apparently by a deranged fan.
"When people think 'the Happiest Place on Earth', right now that's not Orlando," Hill said, referring to a Disney catchphrase for Disneyland.
Edward Jones analyst Robin Diedrich said there might be a slight decline in Walt Disney World attendance, but it would not be material to the company.
"I think most people would reasonably conclude they will get the issue under control and it's probably safe to go," she said.
The alligator attack follows a May 28 incident when a 3-year-old boy fell into a gorilla enclosure at the Cincinnati Zoo, causing zookeepers to kill a gorilla to protect the child.
Animal rights activists criticized Disney for not explicitly warning about alligators in the water.
"A child and apparently five alligators, who were doing only what came naturally to them, have paid with their lives," Ingrid Newkirk, president of People for the Ethical Treatment of Animals, said in a statement.
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