Sam Clancy, from Rochdale, Greater Manchester, was with 22 friends who flew out to the Hungarian capital on Friday.
But hours after arriving the 24-year-old - who has a toddler daughter - became separated from his pals on a night out.
A desperate search was launched for the missing factory worker by worried friends and family.
The Foreign Office confirmed this afternoon that Sam had died.
Local media said Sam had died in a road traffic accident, but no others details of his death have yet been revealed.
A Foreign Office spokesman confirmed this evening: "We are supporting the family of a British man who has died in Budapest. We are in contact with the Hungarian police and hospital services."
The young dad was one of a 22-strong group who flew out for the do on Friday
Friends have been paying tribute to Sam on Facebook as news of his death spread.
Astra Jade Littlehales wrote: "Sam Clancy you were and always will be loved by so many. A beautiful soul snatched from a promising future.
"My heart is well and truly breaking for your loved ones. Fly high & know you won't be forgotten."
Joey Mcloughlin wrote: "Words can't describe the sad news I've heard this morning.
"My thoughts go out to Sam's family. A life taken at a such a young age. R.I.P Sam, you'll be missed."
Just hours after arriving, he became separated from his pals on a night out
Witnesses say Sam was last seen getting into a taxi near a bar in District 6 of the city, the Manchester Evening News reported.
This was shortly before 9.20pm local time on Friday.
The remaining members of the group began looking for him and alerted his family when they still hadn't heard from him on Saturday night.
Sam's dad, Carl, and fiancée, Rebecca, both flew out to Budapest to join the search.
A file picture of Budapest, where Sam was last seen getting into a taxi near a bar in District 6 of the city
Speaking to the M.E.N. yesterday Sam's brother, Matthew, said the family were 'losing their minds' with worry.
He added: "This is completely out of character.
"He would never leave it this long to get in touch unless something was wrong, so we're all worried sick. My mum is losing her mind."