A body has been transferred by the Red Cross to the Israeli military and will undergo forensic identification, a statement from the Israeli Prime Minister's Office said.
Hamas also handed over remains on Tuesday, which Prime Minister Benjamin Netanyahu's office later said were not of any hostage.
The handover of the last hostages' bodies in the Gaza Strip would complete a key condition of the initial part of US President Donald Trump's plan to end the two-year war, which also provides for the Rafah border crossing between the enclave and Egypt to open in both directions.
Israel has kept the crossing shut since the ceasefire came into effect in October, saying that Hamas must abide by the agreement to return all hostages still in the Gaza Strip, living and deceased.
"The crossing will be opened both ways when all of our hostages have been returned," Israeli government spokeswoman Shosh Bedrosian told reporters.
Since the fragile truce started, Hamas has returned all 20 living hostages and 26 bodies in exchange for about 2000 Palestinian detainees and convicted prisoners but two more deceased captives - an Israeli police officer and a Thai agricultural worker - are still in the Gaza Strip.
The armed wing of the Hamas-allied Palestinian Islamic Jihad movement, the al-Quds Brigades, said it had found a hostage body after conducting a search in the north of the enclave, along with a team from the Red Cross.
Hamas and Islamic Jihad said they had handed over the body to the Red Cross late on Wednesday afternoon.
The groups did not say which of the two remaining deceased hostages they believed it to be.
The two are Israeli police officer Ran Gvili and Thai citizen Sudthisak Rinthalak, both kidnapped during Hamas' October 7, 2023 attack on Israel that triggered two years of devastating war in the Gaza Strip.
COGAT, the Israeli military arm that oversees humanitarian matters, said the Rafah crossing would be opened in the coming days to allow Palestinians to cross into Egypt.
The decision to open the crossing for those seeking to leave the Gaza Strip was made in "full co-ordination" with those that have mediated between Israel and Hamas during the war, Bedrosian said.
Egypt, along with Qatar and the United States, has acted as a mediator.
COGAT said it would be opened under the supervision of a European Union mission - a similar mechanism to that employed during a previous Gaza Strip ceasefire agreed in January 2025.
Before the war, the Rafah crossing was the only direct exit point for most Palestinians in the Gaza Strip to reach the outside world and was a key entry point for aid into the territory.
It has been mostly closed throughout the conflict.
At least 16,500 patients in the Gaza Strip require medical care outside of the enclave, according to the United Nations.
Some Gazans have managed to leave for medical treatment abroad through Israel.
Violence has tailed off since the October 10 ceasefire but Israel has continued to strike the enclave and conduct demolitions against what it says is Hamas infrastructure.
Hamas and Israel have traded blame for violating the US-backed agreement.
Health officials at al-Ahli Hospital in Gaza City said on Wednesday that two Palestinians were killed by Israeli gunfire in the Zeitoun suburb.
The Israeli military said it was looking into the report.
More than 350 Palestinians have been killed since the ceasefire between Israel and Hamas went into effect, Gazan health authorities say.
Palestinian militants killed three Israeli soldiers during this time, Israeli authorities said.
