The body was located following intelligence information that led to the tunnel where he was being held, and in a special operation by the IDF and the Shin Bet.

This is an area in which the IDF had operated in the past, but following intelligence information, the forces returned there to locate the bodies.

Alongside Yosef's body, 2-3 bodies of the terrorists who were apparently holding the two were also found. 

Additional intelligence information was also found in the tunnel.

Source: Moriah Ashraf and Doron Kadosh - Telegram