Keegan's family and Newcastle announced in January that the two-time European Footballer of the Year was undergoing cancer treatment, without disclosing details of his illness.
In June, Keegan revealed he had stage four cancer.
"We are devastated to learn of the passing of Kevin Keegan, one of the most iconic, influential and deeply loved figures in our club's history," the Premier League club said in a statement.
"As a player, he brought world-class talent, ambition and belief to St. James' Park, helping to transform perceptions of what Newcastle United could be."
One of English football's most charismatic figures, Keegan enjoyed a glittering playing career as a forward, winning multiple trophies with Liverpool before starring in Germany with Hamburg. His achievements earned him the Ballon d'Or in 1978 and 1979.
He scored 21 goals in 63 appearances for England between 1972 and 1982, captaining the side 31 times.
Keegan later moved into management, revitalising Newcastle United and taking the club to the brink of the Premier League title in the mid-1990s before enduring a more difficult spell as England manager.
"The former England player and manager had been battling cancer and was surrounded by his wife and daughters in his final moments."
His death marks the passing of one of the most influential figures of his generation in English football.
After managing Fulham for two seasons, he took charge of the England national team in February 1999, but resigned in October 2000 following a 1–0 loss to Germany in qualifying for the 2002 FIFA World Cup.
He later managed Manchester City, and made an emotional return to Newcastle in 2008.
Across his club career, he scored 204 goals in 592 appearances, adding 21 goals in 63 caps for the England national team. He captained England on 31 occasions, including at UEFA's Euro 1980.
Among those to offer their condolences was Britain's Prince William, who said: "Incredibly saddened to hear of the passing of Kevin Keegan. A truly remarkable footballer and manager who inspired generations with his talent, passion and love of the game. Above all, he will be remembered as a kind and generous man."
11°C