In a statement, Lauda’s family confirmed the sad news, writing: “With deep sadness, we announce that our beloved Niki has peacefully passed away with his family on Monday, May 20, 2019.
“His unique achievements as an athlete and entrepreneur are and will remain unforgettable, his tireless zest for action, his straightforwardness and his courage remain.
“A role model and a benchmark for all of us, he was a loving and caring husband, father and grandfather away from the public, and he will be missed.”
Lauda is considered to be one of the best drivers in the sport’s history, and was a frequent figure in the paddock throughout recent years – whilst acting as Mercedes’ non-executive chairman.
Lauda, who was a three-time Drivers’ Championship winner, was the only driver to have won a world title with Ferrari and McLaren.
He won world titles in 1975, 1977 and 1984, and was perhaps most famous for his incredible return to the sport after suffering devastating burns in a crash in 1975.
Lauda suffered severe burns and was placed into a coma, and lost most of his right ear as well as the hair on the right side of his face, his eyebrows and eyelids.
Somehow, however, he returned to the sport just two races later. He drove in the Italian Grand Prix just weeks afterwards, finishing fourth.
The McLaren legend was set to be back in the paddock for the Spanish Grand Prix after recent health issues, but was forced to postpone his return to the grid.
He had been Chairman of the Supervisory Board of the Mercedes team since September 2012.
The Austrian had suffered multiple health problems in recent years, and had a double lung transplant last year.
In a message posted on Twitter, Lauda’s former team – McLaren – paid tribute to the former champion.
“All at McLaren are deeply saddened to learn that our friend, colleague and 1984 Formula 1 World Champion, Niki Lauda, has passed away,” the statement read.
“Niki will forever be in our hearts and enshrined in our history.”
Lauda’s brother, Florian, confirmed that the F1 legend was undergoing further treatment earlier this week.
He said in 2018: “Due to kidney problems, he had to be transferred from the rehabilitation centre to a private clinic for dialysis.”
The F1 legend also had two kidney transplants in 1997 and 2005.
Lauda was also an airline entrepreneur, having a large controlling stake in the airline Laudamotion – which he sold to Ryanair.
The Mexico Grand Prix also posted a touching message to the legend.
“The Formula 1 Gran Premio De Mexico family is absolutely devastated after the news of Niki Lauda’s passing,” the Twitter account message read.
“Not only was Niki a F1 legend, but a true friend of the F1ESTA.
“He will be truly missed. Our condolences to his loved ones.”
Jenson Button, former Formula 1 world champion, took to Instagram to post a tribute to Lauda, accompanying the message with a photo of the Austrian’s Ferrari in full flight.
“A legend has left us,” he wrote. “Rest in peace Niki.”