Konstandinos Erik Scurfield, 25, an ex-Royal Marine from Barnsley, died near the Syrian city of Qamishli on 2 March, Kurdish officials have said.
His coffin was handed over to his father and uncle in a ceremony involving hundreds of Syrian Kurds.
Mr Scurfield's father, Chris, said the ceremony had been "overwhelming".
He told BBC Middle East correspondent Jim Muir the emotional ceremony was "very special and very comforting" to his family.
Our correspondent said the ceremony was also a "big moment" for the Kurds, who had turned out to pay their last respects to the Briton who came "halfway round the world to fight - and die - in their struggle against IS militants".
Hundreds of people - including Kurdish fighters, women and foreign fighters in the region - watched as Mr Scurfield's coffin was loaded into an ambulance, where it will be transported to Erbil, the capital of Iraqi Kurdistan.
The coffin was decorated with flowers and was draped with a Kurdish flag and a Union Jack.
Some time would be needed in Erbil to complete the necessary paperwork before Mr Scurfield's body can be flown back to the UK, our correspondent added.
Mr Scurfield, an expert in battlefield medicine, is believed to have travelled to Syria three or four months ago.
He is said to have gone to Syria because he was "horrified by the atrocities being carried out" there.
Kurdish commander Redor Khalil said the Briton had been killed while fighting alongside Kurdish forces in the frontline village of Tel Khuzela.
His family has paid tribute to his "courage, conviction and honour".
In a statement, they said: "We are devastated to confirm the death of our son Konstandinos Erik Scurfield in Syria where he went to support the forces opposing Islamic State.
"His flame might have burned briefly but it burned brightly with love, courage, conviction and honour and we are very proud of him."
The family's friends and neighbours described news of Mr Scurfield's death as "heartbreaking".
The Home Office says there are about 600 people in the region "of interest" but have not given a breakdown of what groups they may be associated with.
The BBC understands about 100 Western volunteers - including some Britons - are fighting as part of the 30,000-strong Kurdish forces.
More than 500 Britons are believed to have travelled to join IS.
The body of the first Briton to be killed while fighting against Islamic State (IS) has been handed over to his family at the Syrian-Iraqi border.