The 18-year-old was missing from home for three days after she failed to meet with friends in Plymouth on Saturday.
Investigators said on Tuesday that the body of a woman was located near Bovisand, South Hams. Formal identification has not yet been carried out.
The family of Ms McLeod has been informed and are being supported by officers, the force said.
Devon and Cornwall Police said on Tuesday evening two men from Plymouth had been arrested on suspicion of murder.
The force’s assistant chief constable said on Wednesday afternoon the men, aged 24 and 26, remained in custody.
“We do not anticipate this to change throughout the day,” Nikki Leaper told reporters at a press conference.
She said “extensive searches and forensic examination of a number of scenes” were being carried out, with the searches expected to continue over the next few days.
The assistant chief constable added: “We understand this is a live and active case and we ask members of the public please to not speculate at this time.”
On Tuesday, the Labour MP for Plymouth Sutton and Devonport, Luke Pollard, said the discovery of a body was another “dark day” for the city.
He tweeted: “It is devastating news for our city that a body has been discovered in the search for missing Bobbi-Anne. My thoughts and love are with the family.
“We await news from the police but this is another dark day for our city. Let’s pull together in the same way we did after Keyham.”
A Facebook page set up to help find Ms McLeod has now attracted more than 10,000 members. Officers were pictured today conducting fingertip and forensic work near the area the teenager went missing.
Detective Inspector Matt Lawrence previously said: “Bobbi-Anne McLeod was last seen leaving her home in Leigham at around 6pm on Saturday 20 November.
“We believe she was due to get a bus from Sheepstor Road into the city centre to meet some friends, but she didn’t show up.
“Bobbi-Anne is 18 years old, 4ft 11in tall and of slight build. She has brown hair, green eyes with straight shoulder-length hair and ear piercings. She was believed to be wearing grey Nike jumper, black ripped jeans and fishnet tights, and light Nike trainers.”
Additional reporting by PA