The 18-year-old is said to have died in an accident around 2am on Thursday morning.
According to Portuguese TV channel TVI24, the tragedy happened in Troia, a peninsular off the coast of Setubal just south of Lisbon, close to the house of Ballack, who retired as a professional footballer in 2012.
Emilio recently posted pictures of his time in Portugal at the weekend, showing pictures of his time at the beach with his family.
The teenager had been spending time at Sublime Beach Club in Alentejo, just days before he passed away.
Emilio was one of Ballack’s three children the former German footballer shares with ex wife Simone Lambe. He was born in 2002, a year after their eldest son, Louis, and was three years older than Ballack’s youngest, Jordi.
Ballack is widely regarded as one of the best German players of all time and is a Premier League and FA Cup winner with Chelsea. He joined the Blues in 2006 after making his name at Bayer Leverkusen and Bayern Munich before spending four years at Stamford Bridge.
Ballack made 98 appearances for Germany, scoring 42 goals in the process.
After joining Chelsea for £18million in 2006, Ballack went on to make 167 appearances for the club, scoring 25 goals and registering 24 assists. It was the longest he had spent at a club.
During his time in Germany, Ballack won the Bundesliga three times, along with the DFB-Pokal all in the same year.