>>212184712 (OP) He is drinking a sacrificial bioform liquid, a powerful genetic material created by the Engineers. He drinks it as an act of ritual sacrifice. This genetic material then spreads and evolves into new life; possibly the origin of human life on Earth, or life in general.
The liquid disintegrates his body at the cellular level. As his body falls into the water, his DNA breaks apart and recombines.
This scene is often viewed as a creation myth, a symbolic Genesis. The Engineer is a cosmic gardener, dying to seed a world with life, echoing ancient ideas of divine sacrifice to bring forth creation.