Lauder died on Saturday of cardiopulmonary arrest, an Estee Lauder Companies Inc spokeswoman said, adding that a company statement would be issued on Monday.
Lauder, who retired in 1995, died at her home on the Upper East Side of Manhattan, The New York Times said in its online edition.
The company declined to give her age, but US media reported she was between 95 and 97.
The company bearing her name was estimated to be worth more than two billion dollars when it went public in 1995, The Times reported.
In its website, the company says it has annual sales of five billion dollars and about 20,000 employees worldwide.
Its products, which include women's makeup, fragrance and skin care products, and men's care products, are sold in more than 130 countries across five continents, the company says.
The company, which Lauder started in New York in 1946 with her husband, Joseph Lauder, expanded over the years with the addition of several cosmetic brands, including Donna Karan Cosmetics, Tommy Hilfiger Toiletries and Aramis. Her husband died in 1982.
"In a perfect world, we'd all be judged on the sweetness of our souls, but in our less than perfect world, the woman who looks pretty has a distinct advantage and, usually, the last word," Lauder wrote in her autobiography, Estee: A Success Story, according to an excerpt in her company's website.
US media reported that Lauder
was between 95 and 97 years-old
Born Josephine Esther Mentzer, Estee Lauder was raised in Corona, in New York's Queens borough, by her Hungarian mother, Rose, and Czech father, Max.
Lauder was mentored by her uncle, John Schotz, a chemist who created beauty products which she would sell to beauty salons and hotels.
The products made their way to New York's Saks Fifth Avenue in 1948 and later to other major department stores.
Lauder "pioneered" the idea of giving away free samples of products with the sale of Estee Lauder merchandise, the company says.
In 1962, she began selecting one supermodel who would be the company's face in advertisements.
The beauties have included Karen Graham, Willow Bay, Paulina Porizkova, English actress Elizabeth Hurley and Carolyn Murphy.
Her sons have been involved in her company for decades.
Some of her grandchildren also play an active role in the company.
Lauder had received numerous awards over the years for her business accomplishments and was involved in charitable causes and civic and cultural activities.
She was involved in the restoration of the Versailles palace outside Paris and her foundation helped build children's playgrounds in New York's famed Central Park, the company says.
After retiring in 1995, she continued visiting department store counters, until her health began deteriorating, her biography says.