The ex-leader of the notorious Revolutionary United Front (RUF), 70, suffered a stroke last year and was partially paralysed.
Sankoh's so-called jungle army of barefoot conscripts, child soldiers and army deserters was notorious for hacking off the limbs of civilians as they razed villages.
They were accused of raping and murdering many in their path in Sierra Leone's 1991-2001 civil war.
The UN-backed Special Court set up by the Sierra Leone government was trying Sankoh for war crimes perpetrated during the war that left 200,000 dead and many thousands mutilated.
"A peaceful end"
Deputy Prosecutor Desmond de Silva said Sankoh "has been granted the peaceful end that he denied to so many others".
"His death will not stop the prosecution from leading evidence through other trials of his involvement in the most evil of deeds that have left a legacy of horror in the minds and memories of those who survive him," he added.
Sankoh was sentenced to death for treason and murder in 1998, but pardoned the following year, when the RUF signed a peace accord with the government that granted the rebels a blanket amnesty for their atrocities.
However, he was re-arrested in 2000, after his bodyguards opened fire on a crowd of civilians protesting outside his house in Freetown, killing around 20 people.
Sankoh was then indicted for war crimes by the UN-backed court set up under the terms of an agreement between the United Nations and Sierra Leone early last year.
The court last week rejected an appeal to have Sankoh's trial halted on health grounds, despite signs that his mental state had been profoundly altered by his stroke last year.
At a separate court hearing last year Sankoh, sporting dreadlocks and sometimes breaking into fits of unexplained laughter, said he was "surprised that I am being tried because I am the leader of the world".
At his last appearance in court on 15 March, he appeared incapable of speaking at all.