The boy, from the Geelong area, was floating down the Kiewa River at Mt Beauty in an inner-tube when police believe his foot was caught in a snag at about 3.30pm (AEDT).
Family and friends tried desperately to release the boy's foot, which caused him to be pulled underwater, but were unable to free him.
Rural Ambulance Victoria spokesman John Mullen said the boy was not breathing when he was pulled from the river.
He said an off-duty community ambulance officer tried to resuscitate him until paramedics arrived.
Leading Senior Constable Peter Dilley from Mt Beauty police said this was a tragic death.
"Our thoughts are with the boy's family as they deal with this tragic accident," Sgt Dilley said.
The Kiewa River is not flood-affected or swollen.
Police will prepare a report for the coroner.
On Monday, eight-year-old Lachlan Collins disappeared while swimming in a billabong at Kialla West, near Shepparton. His body was found the following day.
In a separate incident today, a 56-year-old man is in a serious condition after being pulled from the water at Anglesea, in Victoria's southest.
A Life Saving Victoria helicopter on routine patrol found the unconscious man west of Point Roadknight about 5.20pm (AEDT).
The helicopter crew and members of the public helped him to shore and the crew treated him at the scene, bringing him back to consciousness.
"He came very close to drowning at a beach just around the corner from a patrolled location,'' Life Saving Victoria spokesman Greg Scott said.
The man was flown by air ambulance to The Alfred Hospital.