Ali, who was diagnosed with Parkinson’s Disease 32 years ago, is widely considered to be one of the greatest heavyweights in boxing history.
His family’s spokesman Bob Gunnell confirmed Ali’s death in Phoenix, Arizona, on Friday evening local time.
A statement read: “The Ali family would like to thank everyone for their thoughts, prayers, and support and asks for privacy at this time.”
Ali’s funeral will take place in his hometown of Louisville, Kentucky.
Earlier his daughter, Laila Ali, shared a touching photo on social media and thanked fans for their support.
The 38-year-old posted on her official Facebook page: “I love this photo of my father and my daughter Sydney when she was a baby!
“Thank for all the love and well wishes. I feel your love and appreciate it!!”
Ali, who retired from the ring in 1981, was last admitted to hospital in January 2015 with a severe urinary tract infection.
Nicknamed ‘The Greatest’, Ali became a household name by wining gold at the 1960 Rome Olympics in the heavyweight division.
He went on to win the world heavyweight crown on three separate occasions and retired as a professional in 1981 with a record of 56 wins from 61 fights.
Ali was involved in some unforgettable fights inside the ring, but was equally hailed for his work out of it.
He fought race wars, was stripped of his world title for refusing to fight in the US war in Vietnam and lost his boxing license for close to four years as a result.
The first loss of his professional career - to Joe Frazier - was dubbed ‘The Fight of the Century’ - although he got his title back with a victory over George Foreman in the ‘Rumble in the Jungle’ in 1974.
Other all-time great fights followed, such as the ‘Thrilla in Manila’ when he stopped Frazier after 14 arduous rounds.
In the end, he called time in 1981 with 37 knockout victories to his name and a worldwide following of fans.
Parkinson’s Syndrome was diagnosed soon after, but he did not shy away from the spotlight, lighting the torch at the 1996 Olympics in Atlanta.