The 13-time world champion had been in an induced coma since late last month, when he suffered head injuries after being hit from behind whilst out riding on the Santa Gertrudis main road in Ibiza.
A statement on the MotoGP.com website said: "The MotoGP community extends its deepest condolences to Nieto’s family and friends as we bid farewell to a true giant of motorcycling history who will be greatly missed."
Nieto, whose sons Pablo and Angel Jr were also racers, won six 50cc and seven 125cc world titles in a career lasting from 1964 to 1986. For superstitious reasons he always referred to his total as '12 plus one.'
His career total of 90 wins put him third in the all-time rankings behind Italians Giacomo Agostini and Valentino Rossi.
Nieto's death is the second to rock the international motorcycling community this year following the loss of 2006 MotoGP world champion Nicky Hayden in May, after he was hit by a car when riding a bicycle in Italy.
(Reporting by Julian Shea, editing by Alan Baldwin)
