Devon and Cornwall Police confirmed the body was recovered from rocks to the north of Tresco.
Officers said the family of missing man Josh Clayton, 23, had been informed but no formal identification had been made.
A search was launched for Mr Clayton from Taunton, who works for the Tresco Estate, after he went missing on 13 September.
Sgt Colin Taylor of Devon and Cornwall Police said the body was discovered by a French yachtsman just before 1800 BST on Wednesday and was recovered by the St Mary's lifeboat.
Sgt Taylor said: "The lifeboat crews got to Tean which is just between Tresco and St Martins... From between the high water mark and the low water mark they recovered the body of what's believed to be a male," he said.
He said the body would be repatriated to the mainland on the Scillonian ferry on Thursday and formal identification was likely to be carried out next week.
He said the effort of the local community, police and rescue groups in the eight-day search for Josh Clayton had been "fantastic".
"I am amazed by humanity, I am very very impressed by what happened on Tresco Estate and how they mobilised themselves."
Mike Nellams, of Tresco Estate, said letters had been sent to staff and some holiday-makers to inform them.
"Of course we're all very sad but actually it's a bit of a relief as well, really," he said.
"We're actually a very tight community in the nicest sense... So everybody wanted to help and assist and that's normal for Tresco. Sadly the outcome wasn't for the best but it wasn't for the lack of trying."
A body has been found in the water off the Isles of Scilly.