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This bug appears if you use the web panel to ‘rebuild’ a droplet from debian to ubuntu.
The fix above is correct, just update to digitalocean’s ubuntu mirrors
It looks like your apt repositories are configured incorrectly. They are pointing to the Debian repositories but are also configured for the xenial distribution which is Ubuntu 16.04 so not Debian at all. This configuration is located in the file /etc/apt/source.list.
If your droplet is running Ubuntu, replace all instances of debian with ubuntu, and http://security.debian.org xenial/updates with http://mirrors.digitalocean.com/ubuntu xenial-security. Run apt-get update to refresh the cache after making any changes to the repository list.