Packer's Channel Nine television station in Sydney said on Tuesday his wife Roslyn had issued a statement saying the 68-year-old billionaire died peacefully at home in his bed overnight.
The statement did not give a cause of death. Packer, with an estimated wealth of $5 billion, was 68.
Packer owned about 30% of Publishing & Broadcasting Ltd, which operates Australia's Channel Nine television network, publishes a swag of magazines, and has interests in Australian casinos.
Born in Sydney on 17 December 1937, and educated at one of the city's top private boarding schools, Packer learned much of his business and media acumen from his media tycoon father.
On Sir Frank Packer's death in 1974, Packer took over the family media business and in the next decade expanded the private family company Consolidated Press Holdings.
Packer had two great passions - sport and gambling. He was the country's biggest punter, wagering millions at a time at racetracks and casinos, and turned the cricket world upside down with his World Series revolution in 1977.
"One-day international cricket is now an international phenomena as a result of Kerry Packer," said Creagh O'Connor, Cricket Australia's current chairman.
Packer was not the type to back down from a challenge and when he was refused the broadcast rights to Australian Test cricket in 1977, he launched his own World Series Cricket, poaching some of the game's greatest stars.
It popularised the one-day version of the game, although critics dismissed the colourful uniforms as "pyjamas" and an insult to tradition.
Packer's World Series Cricket
players wore colourful uniforms
"He knew that the players were being in a sense financially downtrodden and it was his job to put it right, and put it right he did," said Richie Benaud, former Australia captain and now Channel Nine's voice of cricket.
Packer once called himself "academically stupid" but there was no doubting his skill in the boardroom, where his jaw-dropping deals were greeted with envy and amazement.
He had recently steered PBL into another of his passions - gambling - by taking control of Australia's largest casino and developing new gaming complexes in Macau with Stanley Ho, a businessman.
Packer's greatest coup came when he sold Channel Nine to Alan Bond, a Perth businessman, for just over a billion Australian dollars (US$750 million in 1987, then bought it back at a fifth of the price three years later.
"You only get one Alan Bond in your lifetime," Packer said. "And I've had mine."
The low point of his public life came in the early 1980s, when an official inquiry was investigating the Australian drugs trade.
Packer was named as a drugs kingpin known as The Goanna but vehemently denied the allegations and was formally cleared of any wrongdoing in 1987, although the episode reinforced his determination to avoid the spotlight.
"You only get one Alan Bond in your lifetime. And I've had mine"
He officially handed over the reins of PBL to his son James in 1998 but was still involved in the day-to-day running of the operation.
Kerry Packer's associates said on Tuesday they were confident his son James was ready to take full control of the business empire built by Australia's richest man, despite blotting his copybook with a failed telecoms venture in 2001.