The fundraising day will take place at Minsthorpe Community College in South Elmsall, in the Wakefield district, where Ben Crawford was previously a pupil.
It is understood that 19-year-old Mr Crawford was found unconscious in the swimming pool of a private villa in Ibiza in the early hours of Sunday morning. CPR was performed but he was pronounced dead.
School principal Ray Henshaw said: "An unimaginably tragic situation that any family will ever to have to face has been made more difficult by the fact that he died abroad and this will bring about extra expenses.
"At Minsthorpe, we are an extended family and we do what all family members do when times are tough- we help out."
Addressing his staff and students, he said: "I know that you have big hearts and always stand up to be counted when we lose one of our own."
The non-uniform day will be held on Friday, July 20 and all proceeds will go to Mr Crawford's family.
The school will also donate money raise during an auction of sporting equipment and memorabilia at its annual Sports Awards ceremony next week.
The announcement comes as a fundraising page set up to help Mr Crawford's family reaches more than £14,000.
More than 600 people have donated to the page since it was launched on Monday.
It says: "Sadly, Ben lost his life at such a young age (19). He was a very kind and beautiful young man, inside and out. No amount of money can ever bring Ben back, but it can help his family bring him home from Spain where he lost his life and help towards the funeral he deserves."
Mr Crawford, understood to be undertaking an apprenticeship in engineering, has been described as an "extraordinary" rugby player and had previously had a scholarship at Castleford Tigers.
He was part of the open age division of Upton ARLFC and had played with the club through its junior teams too.
To donate to the crowdfunding page, visit: www.justgiving.com/crowdfunding/dale-swain