Known as the 'Lion of the Senate', he was third-longest serving senator in US history and was the brother of former President John F Kennedy.
Until the end Ted Kennedy was a force in American politics, recently helping Barack Obama into the White House with his endorsement.
The Kennedy clan announced his passing in the early hours of Wednesday morning.
"We’ve lost the irreplaceable center of our family and joyous light in our lives, but the inspiration of his faith, optimism and perseverance will live on in our hearts forever," they said in a statement.
"He loved this country and devoted his life to serving it. He always believed that our best days were still ahead, but it’s hard to imagine any of them without him."
In this country, Prime Minister Gordon Brown said that Senator Kennedy would be "mourned not just in America but in every continent".
"Even facing illness and death, he never stopped fighting for the causes which were his life's work. I am proud to have counted him as a friend."
His death comes weeks after that of his older sister, Eunice Kennedy Shriver, on August 11.
He is survived by his wife Victoria Reggie, a Washington lawyer 22 years younger than him whom he married in 1992, and three children Kara, Edward Jr, and Patrick from his first marriage.