Rescue crews have been looking for the man ever since he drove the car into the water at high speed late Wednesday.
Several hours later, a body was found in the nearby waters. Officers recovered the body around 11 a.m. Thursday and will turn it over to the King County Medical Examiner.
The incident originally began at about 11:30 p.m. Wednesday as officers were looking for a car that was seen speeding on Queen Anne, said Neil Low of the Seattle police.
As they were investigating, they saw a cloud of dust in the 1000 block of West Ewing Place and witnesses pointed them to where a Nissan Sentra was seen driving through a gate, off a dock and into the water at full speed.
"The officers went down to the water - saw the car in the water, lights in the water," Low said.
Meanwhile, rescue teams from the Seattle Fire Department and Seattle Police Department's Harbor Unit arrived at the Nickerson Street Marina and spotted a man in the water, calling for help.
Officers in a patrol boat attempted to throw a rope to the man four times, but he refused to grab the rope and pushed away from an officer who tried to grab him out of the water. The man then swam away and went under the surface of the water.
Officers and Seattle Fire Department divers searched the canal for more than an hour, but were unable to find the man.
Police say it appears the driver had been involved in some sort of criminal activity. They believe the car was stolen from the Phinney Ridge neighborhood Monday afternoon.
The car earlier was described as having four people inside it, but there were no other bodies in the car when officers went to investigate. They did find a jacket with some keys in the water, and one door of the car was open underwater.
Authorities say they plan to remove the car from the water Thursday.