The announcement that Mr Packer died peacefully at home on Monday night with his family by his bedside was made on his television channel, the Nine Network.
A statement from the Nine Network said Mr Packer will be lovingly remembered and missed enormously by his wife, Mrs Ros Packer, and their children James and Gretel.
Arrangements for a memorial service will be announced.
Mr Packer's ill health in recent years was widely known, however no cause of death was given.
He nearly died while playing polo in 1990, when he suffered a severe attack during which his heart stopped beating for six or seven minutes.
In 2000, Mr Packer had a kidney transplant with an organ donated by his helicopter pilot, and in 2003 underwent emergency surgery to clear blocked arteries.
Mr Packer built his empire on the Nine Network television station and the Australian Consolidated Press magazine publishing business, but in recent years focused on the gaming industry.
He is widely known for popularising one-day cricket after introducing World Series Cricket in the late 1970s.
According to BRW magazine's rich list, Mr Packer's personal wealth was estimated at A$6.9 billion.
Tributes pour in
Australian Prime Minister John Howard described Mr Packer as a "great Australian".
"He was a larger than life character and in so many ways he left his mark on the Australian community over a very long career in business," Mr Howard told reporters in Sydney.
Describing him as one of, if not the most dominant Australian figure on the media scene in a generation, Mr Howard said Mr Packer was deeply committed to the interests of the Australian people.
"He was a generous, very philanthropic person and I know for a fact that many of his kindest and most generous and charitable deeds ... went unreported and unpublished, which was precisely how he wished it to be," said Mr Howard.
News Corp chief Rupert Murdoch praised Mr Packer as one of the best media proprietors and broadcasters Australia had seen.
"Kerry was both a lifelong friend and a tough competitor. He was the most successful businessman of our generation," said Mr Murdoch in a statement.
"He'll never be forgotten, and not just for his contribution to television journalism and television in general, but also I think he may well be remembered more for his contributions to cricket," said Gerald Stone, former 60 Minutes executive producer and SBS board member.
PBL executive director Sam Chisholm said Mr Packer had an immense influence on Australia.
"He has left an indelible mark in business, sport and community service. He is someone who will truly never be forgotten," Mr Chisholm said in a statement.
Veteran Nine presenter Ray Martin said he has fond memories of his boss, who harboured a deep love for television.
While Mr Martin said Mr Packer demanded excellence and would come down like a ton of bricks on anyone who failed him, he was similarly quick to praise.
Future of the family empire
Mr Packer's son, James, has been groomed for some time to take over the reins of the family empire, started by Mr Packer's father Frank.
Advertising guru and family friend Harold Mitchell said James is ready and able to take on the role, and is tough and clever in his own right.
"It's never easy to be the son of a great man, and James has had to live with that, but, as I said to James, he'll take it on and he'll double it, quadruple it," Mr Mitchell told ABC radio.
"He'll also look more to the world, I suspect, than Kerry," he said.
Former PBL chief Peter Yates said James is well-prepared to run the company, and PBL is fortunate to have such a clear and long term succession planning process in place.
Cricket fans mourn
The Australian and South African cricket teams observed a minute's silence before the start of the second day of play in the second cricket Test in Melbourne to mark Mr Packer's passing.
Cricket Australia chairman Creagh O'Connor said Mr Packer stood alongside the late Don Bradman as one of the game's giants.
"That cricket is today taken for granted as a natural part of the Australian way of life is in no small measure due to his influence," said Mr O'Connor in a statement.