"Jimmy passed away peacefully on the night of September 1st surrounded by his family, friends, music and dogs," a statement posted to Buffett's official website and social media pages said late on Friday.
"He lived his life like a song till the very last breath and will be missed beyond measure by so many."
The statement did not say where Buffett died or give a cause of death.
Illness had forced him to reschedule concerts in May and Buffett acknowledged in social media posts that he had been in hospital but provided no specifics.
Margaritaville, released on February 14, 1977, quickly took on a life of its own, becoming a state of mind for those "wastin' away" - an excuse for a life of low-key fun and escapism for those "growing older, but not up".
The song is the unhurried portrait of a loafer on his front verandah, watching tourists sunbathe while a pot of prawns is beginning to boil.
The signer has a new tattoo, a likely hangover and regrets over a lost love.
Somewhere there is a misplaced salt shaker.
"What seems like a simple ditty about getting blotto and mending a broken heart turns out to be a profound meditation on the often painful inertia of beach dwelling," Spin magazine wrote in 2021.
"The tourists come and go, one group indistinguishable from the other.
"Waves crest and break whether somebody is there to witness it or not.
"Everything that means anything has already happened and you're not even sure when."
The song - from the album Changes in Latitudes, Changes in Attitudes - spent 22 weeks on the Billboard Hot 100 chart and peaked at number eight.
The song was inducted into the Grammy Hall of Fame in 2016 for its cultural and historic significance, became a karaoke standard and helped brand Key West, Florida, as a distinct sound of music and a destination known the world over.
"There was no such place as Margaritaville," Buffett told the Arizona Republic in 2021.
"It was a made-up place in my mind, basically made up about my experiences in Key West and having to leave Key West and go on the road to work and then come back and spend time by the beach."
The song soon inspired restaurants and resorts, turning Buffett's alleged desire for the simplicity of island life into a multi-million-dollar brand.
He landed at No. 13 in Forbes' America's Richest Celebrities in 2016 with a net worth of $US550 million ($A851 million).
