The tragedy happened on Sunday evening at a rented villa in the popular Mijas Costa between Marbella and Fuengirola on Spain's Costa del Sol.
The child, who has not been named, drowned in the private pool at the rented villa while reportedly running around with other children, according to local newspaper Diario Sur.
The parents of the child were entertaining friends at the villa when the alarm was raised by one of the older children at just after 8pm.
Around 20 people were at the villa at the time, including a doctor friend of the parents, who attempted to resuscitate the drowned child while waiting for emergency services to arrive.
A Foreign Office spokesman said: "We can confirm the death of a British national in Spain on 16 August.
"We are in contact with local authorities and have provided the family with advice on bereavement abroad, including on repatriation."Each year an average of 400 drownings occur in Spain with between 14 and 19 percent of them happening in swimming pools.