The 19-month-old boy was pulled out of the water unconscious at about 6.15pm on Wednesday.
An air ambulance was sent to the area as part of the emergency response but efforts to revive the child failed and he was pronounced dead at the scene.
The incident happened at a private pool in Aigues, a village a short drive inland from the coast to the north of Alicante and southwest of Benidorm.
A routine police investigation is ongoing. Sources confirmed the youngster who died was British.
It was not immediately clear if the toddler was on holiday with his family or lived in Spain.
Wednesday’s death comes following two others in the area involving British nationals.
Expat Ingrid Dale, 67, originally from Dereham in Norfolk, died after being stung by a wasp in a Costa Blanca restaurant on 9 May.
She is said to have gone into anaphylactic shock in front of friends at the bar in the coastal town of Moraira, half an hour north of Benidorm.
Ms Dale died in an ambulance outside the Hill Top Sports Bar & Grill after going into cardiac arrest before she could be taken to hospital.
Friends and well-wishers spoke of their heartbreak over the widow’s death as it emerged she was at a lunch to help raise funds for Ukrainian families when she was stung.
Later the same day a British man drowned in a nearby river, which had claimed the lives of three other people in the past month, as he tried to save his dog.
Former Royal Navy sailor Paul Lebihan, 24, originally from Gateshead, died after getting into difficulties in the river at a beauty spot a short drive from the Costa Blanca resort of Benidorm.