A statement on behalf of the family said he was "surrounded by his wife and daughters in his final moments."
"Kevin, a double Ballon d'Or winner, was a much loved husband, father and grandfather. The family would like to thank Kevin's incredible medical team for all their support. This is a hugely difficult time and they are requesting space and privacy."
Keegan's family initially disclosed he was battling the disease in January, after he had "further evaluation of ongoing abdominal symptoms" in hospital, before revealing in June that the cancer had reached stage four, the most advanced stage of the disease, meaning it had spread to other parts of his body.
One of English football's most decorated players, Keegan enjoyed spells at Scunthorpe United, Liverpool, Hamburg, Southampton and Newcastle during an illustrious playing career, twice being named European Footballer of the Year during his time in Germany. He later went on to manage Newcastle, Fulham, England and Manchester City, guiding Newcastle to the brink of the Premier League title in 1995-96 and leading his boyhood England side between 1999 and 2000.
Tributes poured in from across the game. Newcastle United described Keegan as "one of the most iconic, influential and deeply loved figures in our club's history."
"Kevin was more than a legendary footballer and manager. He was the beating heart of Newcastle United for generations of supporters. Kevin's impact will not be measured by appearances or results. It will live on in the memories he created with club and country, the dreams he inspired wherever he went, and the generations of supporters around the world who fell in love with football because of him."
Liverpool, for whom Keegan played between 1971 and 1977, said his "indomitable spirit and remarkable contribution will be forever etched in our history and his legacy will live on." Hamburg said football had lost one of its "defining figures" and that they would always "cherish" his memory, while Fulham said Keegan "forged a strong connection" with the fans, who would "forever hold wonderful memories" of his short time at the club. Scunthorpe, his first professional club, described him as "one of the best players of his generation," with an "inspirational demeanour" and "brilliant personality." England and Manchester City both offered their condolences to the Keegan family, with the latter describing him as "one of the most iconic and fondly remembered figures in English football."
Among those to pay personal tribute was Graeme Souness, who described Keegan as a man who became a superstar but never changed.
"If you ever wanted an example of a man who became a superstar but never changed as a man, Kevin Keegan would be top of that list. For everything he achieved in the game - the trophies, two Ballon d'Or - his greatest quality was the humility he carried with him through every waking moment. He treated every person he met in the same way: with utmost respect.
"To say he was an absolute gentleman seems an understatement. He was a class act. This was a genuine superstar. If only you could bottle the attitude he had and sell it to the players today. I was in a restaurant not so long ago when I witnessed a young player, a so-called star, refuse to do a selfie with a fan. That was the absolute polar opposite to Kevin.
"Kevin Keegan was a genuinely humble man who recognised he had got lucky in life, but boy did he make the most out of his talent and work hard at it. He left nothing on the table. He got the absolute best out of himself every time he went out and played football whether training or in a game. His workrate was phenomenal and his enthusiasm lifted everyone around him."
England will celebrate Keegan's life when they host Spain in a UEFA Nations League match at Wembley on 26 September.