The boxer's body was discovered at his home in the small town of Portland early on Saturday morning.
His body was cut with several wounds believed to have been inflicted with a machete.
The police, speaking several hours after his body was discovered, said they had no suspects.
Radio reports said Berbick had had several run-ins with neighbours over land disputes.
Berbick, 51, fought as a heavyweight for Jamaica at the 1976 Montreal Olympics, although he later became a Canadian citizen.
He finished his fight career with 50 wins, 11 losses and one draw with 33 knockouts, and was scheduled to be ringside on Sunday night at a local fight card in St Ann's Bay.
Last March he celebrated the 20th anniversary of his ascending to the heavyweight throne, although it was a reign that lasted only eight months.
Berbick achieved lasting fame however on December 11, 1981 when he won a unanimous 10-round bout against Ali in Nassau, the Bahamas.
The verdict prompted Ali to retire for the final time just days short of his 40th birthday.
Berbick's first world heavyweight title bout had come earlier in 1981. On April 11, World Boxing Council champion Larry Holmes, then 31, claimed a unanimous 15-round decision over Berbick in Las Vegas.
Berbick's next chance at a major title came on March 22, 1986, when, aged 33, he captured a unanimous 15-round decision over Pinklon Thomas in Las Vegas.
On November 22, 1986, Tyson stopped Berbick in the second round to win the WBC heavyweight title in Las Vegas, becoming the youngest champion in heavyweight history at the age of 20.
Berbick's last fight was in May 2000 when he defeated Canadian Shane Sutcliffe over 12 rounds.
A scan after the fight revealed a blood clot in his brain and his boxing licence was revoked.