Ulysses is in the eighth circle, in the ditch of fraudulent counselors, inside a flame with a divided tip that hides the sinner. In Canto XXVI, at Virgil's request, he tells Dante how he died: he left Circe's house, did not let his son, his aged father and his wife hold him back, and sailed beyond the Pillars of Hercules, until a shipwreck before a dark mountain.
The one who explains why he is there is Virgil. Within the flame, Ulysses and Diomedes torment each other together for the trick of the horse that opened the door through which came out the seed of the Romans, for a deceit against Achilles, and for the theft of the Palladium. The final voyage, by contrast, does not come from any ancient source the poem inherits: what Ulysses tells of it is Dante's invention.
The speech he gives his companions is the most admired passage of the cantica: "Consider your origin: you were not made to live like brutes, but to pursue virtue and knowledge." The ardor to become expert in the world, in human vices and in worth, wins in him over love for his son, his father and his wife. The voyage ends when a new land, a mountain dark from afar, raises a whirlwind and the sea closes over them, "as Another pleased."
The poem does not decide whether the punishment is for the fraud or for the voyage. It gives Ulysses the most beautiful speech and keeps him in the fire, and leaves that tension to the reader.