Slobodan Milosevic had been on trial for genocide, crimes against humanity and war crimes since 2002.
The UN war crimes court in The Hague, where he was standing trial, said: "Today, Saturday March 11, Slobodan Milosevic was found lifeless on his bed in his cell at the United Nations detention unit in Scheveningen. The guard immediately alerted the detention unit officer in command and the medical officer. The latter confirmed that Slobodan Milosevic was dead."
The court said it was opening an inquiry into Milosevic's death and an autopsy and a toxicological report would be carried out, and a Serbian pathologist would be present. Milosevic's family were informed of his death, it said.
The independent Serb Radio station B92 first broke the news, saying it had been told by unofficial sources at The Hague.
According to media reports, Philippe Douste-Blazy, the French foreign minister, said that Milosovic's death was of natural causes and not suicide. It is believed that he may have been dead for a few hours.
"Slobodan Milosevic was found lifeless on his bed in his cell at the United Nations detention unit"
UN war crimes court statement
Milosevic's heart condition and high blood pressure have repeatedly interrupted his trial, and last month the tribunal rejected a request from Milosevic to go to Russia for medical treatment.
Milosevic, who was in office for 13 years, was sent to The Hague war crimes court in June 2001, eight months after he was toppled in a popular uprising.
When his trial began in Febuary 2002, Milosevic faced 60 counts of war crimes and crimes against humanity for his alleged central role in the wars in Bosnia, Croatia and Kosovo in which 200,000 people died.
Widely blamed in the West for the violent break-up of Yugoslavia in the 1990s, Milosevic was waiting for a court decision on his request to subpoena Bill Clinton, the former US president, as a witness.
He was due to complete his defence at the war crimes tribunal this summer. During the months of presenting his case, he barely touched on the Bosnian war or the massacre of more than 8000 Bosnian Muslims in the enclave of Srebrenica in July 1995. Instead, he focused on the 1999 war in Kosovo.
Just last month, the International Court of Justice in The Hague began hearings on a claim by Bosnia that Serbia was responsible for genocide during the 1992-95 Bosnian war - the first time a state has been put on trial for the worst crime of international law.
Born in Pozarevac, Serbia in 1941.
His father and mother both committed suicide
A lawyer by education, he was a one time communist
Worked as the chief of the state gas company and also briefly as a banker in the United States, before he entered politics
He succeeded the Yugoslav dictator Marshal Tito in 1980
Milosevic's death comes less than a week after Milan Babic, the former Croatian Serb leader and the star witness in his trial, was found dead in the same prison.
Babic's testimony in 2002 described a political and military command structure headed by Milosevic in Belgrade that operated behind the scenes.
Babic, who was serving a 13-year prison sentence, committed suicide.
Milosevic's death will be a crushing blow to the tribunal and to those who were looking to establish an authoritative historical record of the Balkan wars.
Lufi Haziri, the deputy prime minister of Kosovo, said: "Unfortunately, he did not face justice for crimes he has committed in Kosovo as well."