Firefighters dragged the 40-year-old out of the building in Kemp Town, Brighton, but pronounced him dead soon afterwards.
Another man, also aged 48, was arrested and was being questioned last night on suspicion of arson but Sussex Police refused to confirm if the death was being treated as suspicious.
The dead man had not been formally identified when the Argus went to print.
The former school building in St George’s Terrace had been squatted until Sunday, November 25 and it is understood a window was broken to gain access on Tuesday night (November 27).
Fire crews were called to the two-storey building at 3.45am yesterday to find it full of smoke.
A spokesman for East Sussex Fire and Rescue Service said: “Crews entered the building wearing breathing apparatus and used a thermal imaging camera to locate a casualty, who was rescued but sadly pronounced dead at the scene.”
Forty firefighters and eight fire engines spent nearly three hours bringing the fire under control.
Witness Helen Carter, of Hampshire Court, Brighton, said: “The strange thing was there were no flames or smoke visible anywhere but the sky was just lit up with sirens.
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