The body is believed to be that of the mising 84 year old local man.
The man was reported missing to Gardai yesterday but had not been seen for a number of hours before that.
Search and rescue teams were searching the River Lennon since early this morning.
Members of Lough Swilly Lifeboat, Mulroy Coastguard as well as inshore search teams had been combing the area.
Gardai called in the search teams as fears grew for the man’s safety.
A search of derelict buildings also took place in the town.
At this stage it is unclear as to the circumstances surrounding the man’s disappearance.
The man is well-known in the locality and his family also live in the area.
A source said “This is tragic for the family. But at least they have found him now despite the sad outcome.”