The woman’s headless body was discovered with her hands chopped off and a deep cut to her stomach at Las Cañas beach in Marbella, Spain.
The grim find was made by a group of friends who were sitting on a restaurant terrace when they spotted something in the water on Sunday evening.
An alarm was raised by the group who initially feared it was a person drowning.
The woman – who was found naked near the Club 200 restaurant – is thought to have been around 30 years old, local reports claim.
She was believed to have been in the water for only a short time before being discovered.
The area was immediately cordoned off by officers from the Civil Guard – which is the police force leading the probe – before the body was taken away for a post-mortem, expected to take place in the next 48 hours.
Detectives are scouring missing persons reports in a bid to discover the dead woman’s name.
Enquiries are ongoing.