Mr Mandela had suffered from a series of lung infections over the past two years and died at home in the company of his family.
The news of his passing was made in a statement made by South African President Jacob Zuma which was broadcast on national TV.
“Our thoughts are with the South African people who today mourn the loss of the one person who more than any other came to embody their sense of a common nation,” he said from Pretoria.
“Our thoughts are with the millions of people across the world who embraced Madiba as their own and who saw his cause as their cause.
“This is the moment of our deepest sorrow. Our nation has lost his greatest son. Yet what made Nelson Mandela great was precisely what made him human – we saw in him what we seek in ourselves and in him we saw so much of ourselves.”
Mr Zuma said that Mr Mandela will be given a state funeral and ordered all national flags to be lowered to half mast from tomorrow until after the service.
“Nelson Mandela bought us together and it is together that we will bid him farewell,” he said.
Minutes after the news broke British politicians from across the political divide begun to pay their respects.
“A great light has gone out in the world,” said David Cameron, the Prime Minister, in a statement released on Twitter.
“Nelson Mandela was a hero of our time. I’ve asked for the flag at No10 to be flown at half mast.”
Former prime minister Tony Blair said the political leader was a “great man” who had made racism “not just immoral but stupid”.
“He was a unique political figure at a unique moment in history,” he said. “He was a great man, a great leader and the world’s most powerful symbol of reconciliation, hope and progress.”
Mr Mandela’s wife Graca Machel, and some of his three children, 17 grandchildren and 13 great-grandchildren were with him in his final days, with other family and friends in attendance.
Early this morning, it was confirmed that Mr Mandela’s daughters with Winnie Mandela, Zenani and Zindzi, both attended the premiere of his biopic in London and were given the news as they sat watching the film.
“They received the news of their father’s passing during the screening and immediately left the cinema,” a spokesman for the Nelson Mandela Foundation said.
Mr Mandela’s old ally and friend Ahmed Kathrada, with whom he shared his prison sentence on Robben Island, said that losing “the last of the A-team, my older brother” left him feeling “bereft and lonely”.
“We have known each other for 67 years, and I never imagined I’d be witness to the unavoidable and traumatic reality of your passing,” he said.
“I had the enviable privilege of being alive and walking the earth with you through the bad times and the good. It has been a long walk, with many challenges that at times seemed insurmountable. And yet we never faltered, and the strength of leaders like you and Walter (Sisulu, the ANC Secretary General) always shone a light on the path and kept our destination and our people’s future in view.”
The former president’s body will most likely to taken to the Waterkloof Military Base in Pretoria, where it will be embalmed and prepared for public display.
A memorial service at Soweto’s FNB stadium, where Mr Mandela made his last public appearance at the closing ceremony of the football World Cup in July 2010, is expected to be attended by tens of thousands of people including foreign heads of state.
Many more will travel to the administrative capital Pretoria where Mr Mandela’s body will lie in state for up to a week at the Union Buildings, where he was inaugurated as South Africa’s first black, democratic president in 1994.
In accordance with his final wishes, and those of his family, he will then be flown the 550 miles south to his home village of Qunu, in the rural Eastern Cape. There, following a traditional ceremony, he will be buried on a hillside which forms part of his estate, overlooking the verdant valley where he once tended his family’s livestock and played with other boys.
Despite his advanced years and his almost complete disappearance from the public stage, the news of Mr Mandela’s passing will be met with overwhelming sadness around the country.
Each time he has been admitted to hospital in recent years, first with respiratory problems, then with a hernia and lately, a series of lung infections, South Africans have held their breath and whispered prayers for his recovery.
When Mr Mandela last appeared in public aged 91, any suggestion that he might one day die was met with accusations of insensitivity and ignorance about African traditions.
But as the Nobel Peace laureate has grown weaker and his health problems have mounted up, the prayers for his recovery have been replaced with prayers for his comfort, and the strength of his family.
During his latest admission, South Africans began to ask themselves what life would be like without him.
Today, they will descend into a long period of mourning side by side with Mr Mandela’s large family.
Nelson Rolihlahla (meaning “troublemaker”) Mandela started out as a fiery young lawyer who battled South Africa’s dehumanising colour bar first by organising mass acts of defiance and later through armed resistance.
When he was jailed in 1962, following a tip-off by the US Central Intelligence Agency, he was seen as a terrorist in South Africa and abroad.
But by the time he was released 27 years later, his name had become synonymous around the world with the struggle for justice against tyranny and oppression.
He too had changed, into a more measured, thoughtful and dignified figure, ready and eager to shoulder the huge burden of transforming his country.
Nelson Mandela’s inauguration in 1994 as South Africa’s first black president was attended by an estimated 100,000 people of all races who formed a sea of supporters extending outwards from the emerald lawns of the Union Buildings into Pretoria’s jacaranda-lined streets.
Among foreign dignitaries from 140 countries were US First Lady Hillary Clinton, Vice-President Al Gore, Cuba leader Fidel Castro, the Duke of Edinburgh and Palestinian Liberation Organisation head Yasser Arafat. Millions more people around the world watched the event on television.
Glasses perched on his nose, eyes narrowed against the African sun and speaking in his trademark gravelly voice, Mr Mandela told his audience: “We saw our country tear itself apart in terrible conflict. The time for healing of wounds has come. Never, never again will this beautiful land experience the oppression of one by another.”
Despite the fears of white South Africans that Mr Mandela would turn on them after all of the years of deprivation inflicted on him and his people, he killed any potential conflict between South Africa’s many race groups with kindness.
One of his first acts as president was to visit 94-year-old Betsy Verwoerd, the widow of apartheid’s architect HF Vorwoerd, for tea and koeksister donuts. He invited previously staunch defenders of the repressive policy to join his government, and made a point of talking to Afrikaners in their own language.
In an act of reconciliation celebrated by the Hollywood film Invictus, he declared rugby his new favourite sport, donned a Springbok shirt and urged his countrymen to rally around the national team in the 1995 World Cup which they went on to win.
The crowds which will gather this week to bid farewell to Mr Mandela are expected to be larger than at any event during his life.
Among those who will be invited to attend his funeral are The Queen, US President Barack Obama, the Pope, U2 frontman Bono, Microsoft founder Bill Gates, and FW de Klerk, the former South African president with whom he shared the Nobel Peace Prize for dismantling apartheid.
Condolence books will be opened in all of South Africa’s diplomatic missions abroad.
In a column during Mr Mandela’s hospital stay in January 2011, Nic Dawes, editor of the South African weekly Mail and Guardian, sought to explain why the great statesman would be so missed when he finally slipped away.
“What South Africans feel for Madiba is not simply affection or respect. Even love may not be a strong enough word,” he wrote
“His presence is part of the structure of our national being. We worry that we may not be quite ourselves without him.”