The 65 year old’s health had been diminishing but his death at this time was not been expected, according his son-in-law Chris Turner.
"It was peaceful," he said, adding that the writer's wife Wendy and other family members were by his side at their Princeton, New Jersey home.
Jaws - both as a novel and a film - terrified beachgoers and kept many out of the water for years.
It sold more than 20 million copies, and Mr Benchley even had a cameo as a reporter in the 1975 Steven Spielberg film.
Mr Benchley said he had been interested in sharks since his childhood, when in 1964, he read about a fisherman who caught a 2,064kg great white shark off Long Island.
"I thought to myself, 'What would happen if one of those came around and wouldn't go away?' That was the seed idea of Jaws," he said in an interview.
But he didn't pursue the idea until 1971.
By the time the book, his first novel, came out in early 1974, it had earned more than $1 million before the first press run, including $575,000 for the paperback rights and from sales to books clubs and the film's producers.
Mr Benchley also wrote other water-based suspense fiction including The Deep and The Island that were also developed into movies.
In addition to the fame he achieved as a novelist, Mr Benchley was a reporter for the Washington Post and Newsweek.
He wrote for magazines and had been a speechwriter for US President Lyndon Johnson from 1967 until January 1969.
Among his latest books was Shark Life: True Stories About Sharks and the Sea, which was published only last year.
"Everything I've written is based on something that has happened to me or something that I know a great deal about," Mr Benchley said.
Other books included White Shark, Beast - about a giant squid - and Rummies, about an alcoholic's journey through recovery and rehabilitation.
He is survived by his wife and two children.
Funeral arrangements have not yet been formalised.