Christopher O'Kane, an off-duty soldier, died after a fall from a bicycle rickshaw in which he suffered severe head injuries.
Mr O'Kane, 26, from East Lothian, had been celebrating his birthday in the city and was a passenger in the back of the cycle-cab with another man when he is said to have fallen from the vehicle and struck his head on Lothian Road during the early hours of Sunday morning.
He was taken to the Royal Infirmary, where he died at around 11am yesterday with his family at his bedside.
Licensing bosses have now vowed to tighten up the regulations governing the pedicabs in light of safety fears.
Mr O'Kane's aunt, Georgina Naylor, said he was a corporal with the Royal Electrical and Mechanical Engineers, attached to 17 Port and Maritime based at Southampton, and had served in Iraq and Afghanistan.
She said: "He just lost his footing, fell backwards and suffered a serious head injury from which he didn't recover. He was an angel, a hero to this family and will be sadly missed."
Mr O'Kane, who was also a fitness instructor, joined the army at 16 and served with the Royal Scots, based at Dreghorn barracks in Edinburgh, before transferring to Southampton.
Mrs Naylor, who also voiced concerns about rickshaw safety, said the family was in shock.
"For him to have gone to Afghanistan and Iraq and miss bullets, mines and bombs, then have his head smashed by a pavement in a fall is beyond us," she said.
The company at the centre of the incident claimed Mr O'Kane had injured himself after jumping from the vehicle to speak to a group of girls.
Greg Aitken, owner of Chariot Cabs which runs about 20 pedicabs in the city, said: "My sympathies are with the young man's family. The driver of the rickshaw did everything he could to assist the man."
The City of Edinburgh Council has confirmed that it is now to re-examine the use of the vehicles across the city. Councillor Colin Keir, who chairs the council's regulatory committee, said the rules surrounding pedicabs needed to be made more "robust".
He said: "I would not want to comment on this particular incident. However, it is my intention to bring forward a review of how these things are licensed. I'm going to get officers to look at the legislation and how we can make it more robust. Hopefully it's something we can tighten up."
As pedicabs are not motorised, they are not covered by the taxi code of licensing, but drivers need a police criminal record check and a street traders' licence. There are currently thought to be 40-45 pedicabs operating in the city.
Councillor Mark McInnes, the Tory's transport spokesman, said it was time to tighten up the trade's health and safety laws surrounding the trade.
He said: "The council needs to be proactive like it would be with any other form of transport as we've now seen, very sadly, how accidents can happen."
In 2001, a 22-year-old woman from Ireland nearly died after her scarf became entangled in the wheels of a city rickshaw.