He was suffering from a long and serious illness and in recent years, his health has been in decline. His cause of death has not been announced.
Mr Gorbachev became general secretary of the Soviet Communist Party, and de facto leader of the country, in 1985.
At the time, he was 54 – the youngest member of the ruling council known as the Politburo, and was seen as a breath of fresh air after several ageing leaders. His predecessor, Konstantin Chernenko, had died aged 73 after just over a year in office.
Few leaders have had such a profound effect on the global order, but Mr Gorbachev did not come to power seeking to end the Soviet grip over eastern Europe. Rather, he hoped to revitalise its society.
Mr Gorbachev opened up the Soviet Union to the world and introduced a set of reforms which help bring the Cold War to a peaceful end.
The Soviet economy had been struggling for years to keep up with the US and his policy of Perestroika sought to introduce some market-like reforms to the state run system.
Internationally he reached arms control deals with the US, refused to intervene when eastern European nations rose up against their Communist rulers and ended the bloody Soviet war in Afghanistan that had raged since 1979.
Meanwhile, his policy of glasnost, or openness, allowed people to criticise the government in a way which had been previously unthinkable.
But it also unleashed nationalist sentiments in many regions of the country which eventually undermined the stability of the country and led to its collapse.
He was unable to prevent the slow collapse of the Soviet Union, from which modern Russia emerged.
In 1991, after a shambolically organised coup by communist hardliners failed, Mr Gorbachev agreed to dissolve the Soviet Union and left office.
He is seen in the West as an architect of reform who created the conditions for the end of the Cold War in 1991 – a time of deep tensions between the Soviet Union and Western nations, including the US and Britain.
He was awarded the Nobel Peace Prize in 1990 “for the leading role he played in the radical changes in East-West relations”.
But in the new Russia that emerged after 1991 he has been on the fringes of politics, focusing on educational and humanitarian projects.
Mr Gorbachev made one ill-fated attempt to return to political life in 1996, receiving just 0.5% of the vote in presidential elections.
He will be buried in Moscow’s Novodevichy cemetery, the resting place of many prominent Russians, next to his wife Raisa who died of leukaemia in 1999, Tass news agency said.