The teen, who allegedly turned 19, was in Xochimilco, a neighbourhood in Mexico City which is famous for its canals, at the time of the incident.
It’s reported that the youngster, whose name has not been released, was aboard a colourful vessel – locally known as a trajinera – when he tumbled into the water.
His large group of friends and family were travelling together in several boats and after a period of drinking, revellers started hopping from one trajinera to another, according to reports.
A video filmed by a friend shows the 19-year-old falling into the canal and disappearing underwater while trying to jump from one boat to another.
Attendees searched for the fallen teen in the water for several minutes and called the emergency services when they were unable to locate him.
The search team reportedly found his body in the canal 12 hours later.
Due to its historical importance, Unesco has ruled the canal system as a World Heritage Site and it can’t be shut down following the teen’s tragic death.
The investigation into the teen’s death is ongoing.