In a text message to Reuters, Pavarotti's manager Terri Robson said: "Luciano Pavarotti died one hour ago".
In a separate email statement, Robson said "the Maestro fought a long, tough battle against the pancreatic cancer which eventually took his life.
In fitting with the approach that characterised his life and work, he remained positive until finally succumbing to the last stages of his illness."
A TV station in Pavarotti's home city of Modena had earlier reported that the opera star was unconscious and suffering from kidney failure, and that family and friends had gathered at his villa to be near him.
Luciano Pavarotti was hospitalised last month after suffering a fever. He underwent two weeks of tests and treatment before being released.
Hailed as one of the greatest tenors of his generation, Pavarotti underwent surgery for pancreatic cancer more than a year ago.
Following his surgery the singer cancelled subsequent concerts, sparking fears that he may never perform in public again. He was forced to abandon a 40-concert farewell tour that began in May 2004.
Pavarotti broke into the world of opera when he won the top prize in a competition in 1961, for which he was rewarded with the role of Rodolphe in Puccini's La Boheme in nearby Reggio Emilia.
He went on to perform across Europe before taking Covent Garden and the New York Metropolitan Opera by storm in 1972 with a production of Donizetti's La Fille du Regiment.
The star helped popularise opera among mainstream music fans, performing alongside pop musicians, and with fellow singers Jose Carreras and Placido Domingo, as the Three Tenors.
The Maestro in retrospect
Born on October 12, 1935 in the quiet northern Italian town of Modena, Luciano Pavarotti was the only son of a baker whose love of opera and own modest singing gift were an important factor in determining the boy's future career.
After six years of study, he won he won first prize in a competition in 1961 and was rewarded with the role of Rodolphe in Puccini's "La Boheme" in nearby Reggio Emilia.
By 1963 he was singing in Amsterdam, Vienna, Zurich and London.
His American recognition came in February 1965 in a production of Donizetti's "Lucia di Lammermoor" in Miami, Florida, with Joan Sutherland as Lucia.
It was with Sutherland in February 1972 that he truly came of age, taking Covent Garden and the New York Metropolitan Opera by storm with an amazing production of another Donizetti favourite, "La Fille du Regiment".
The late signer hit nine effortless top notes in the first aria, a feat which saw the audience erupt in a standing ovation and also earned him the epithet "King of the high C's".