Princess Margaret died peacefully in her sleep this morning, Buckingham Palace announced.
In a statement the Palace said: "The Queen, with great sadness, has asked for the following announcement to be made immediately.
"Her beloved sister, Princess Margaret, died peacefully in her sleep this morning at 6.30am in the King Edward VII Hospital."
The statement continued: "Her children, Lord Linley and Lady Sarah Chatto, were at her side. Princess Margaret suffered a further stroke yesterday afternoon.
"She developed cardiac problems during the night and was taken from Kensington Palace to the King Edward VII Hospital at 2.30am.
"Lord Linley and Lady Sarah were with her and the Queen was kept fully informed throughout the night.
"Queen Elizabeth, the Queen Mother, and other members of the Royal Family are being informed."
Princess Margaret, 71, suffered at least two previous strokes in recent years. She was last seen in public before Christmas at the 100th birthday party for Princess Alice, the Dowager Duchess of Gloucester.
Margaret was confined to a wheelchair and wore heavy dark glasses, her sight having been affected by a stroke.
Her face also appeared puffy, probably due to the effects of medication.
The Queen yesterday left Sandringham, her Norfolk estate, and travelled to Windsor where she remained in touch with developments.
The 101-year-old Queen Mother, who is recovering from a cold, stayed on at Sandringham House.
The death will cast a shadow over the Royal Golden Jubilee. On Wednesday, Accession Day, the Queen marked the 50th anniversary of her coming to the throne.
A nationwide tour and a full programme of Jubilee celebrations is planned for later in the year. On 18 February, the Queen is due to start a visit to Jamaica, New Zealand and Australia.Reuse content