When water becomes ice,the structure looks like below:



It is a tetrahedral structure with lots of empty space between each tetrahedral unit(i think).This structure is the reason why ice floats on water,due to the fact that it is less dense.

When ice melts,some of these (hydrogen) bonds are broken,making the water molecule free to move around.At the same time,the voids between the tetrahedral structure is filled with bits of free moving water molecule.Think something like the structure in the picture above collapse.

The volume shrinks because the water molecules now occupy the empty spaces between the the ice molecule.At the same time,we know that density is inversely proportional to volume,hence,the density of water increased from ice.


Cheers.