South Korea's biggest conglomerate said Lee died with his family by his side, including his son, Samsung Vice Chairman Jay Y. Lee.
But Lee transformed it into a global power - by the time he was left bedridden by a heart attack in 2014, it was the world's biggest maker of smartphones and memory chips.
"As South Korea's most successful entrepreneur, (Lee Kun-Hee) received a dazzling spotlight, but he had many vicissitudes full of grace and disgrace", the ruling Democratic Party said in a statement.
"All of us at Samsung will cherish his memory and are grateful for the journey we shared with him", Samsung said in a statement.
Lee's son, Jay Y. Lee, became vice chairman of Samsung Electronics in December 2012 and his daughter, Lee Boo-jin, is president of Hotel Shilla Co., a Samsung affiliate, raising concerns that the founding family would maintain its grip on the conglomerate at the expense of minority shareholders.
Geoffrey Cain, who wrote a book on Samsung, said Mr Lee was instrumental in the company's success.
Samsung was ensnared in the 2016-17 corruption scandal that led to then-President Park Geun-hye's impeachment and imprisonment.
Lee Kun-Hee was a stern, terse leader who focused on big-picture strategies, leaving details and daily management to executives.
But experts say the succession may be riddled with challenges as the younger Lee is facing trial for unfair trading, stock manipulation and breach of trust in relation to a 2015 merger of two Samsung affiliates in order to consolidate his control of the business.
The death of Lee, with a net worth of US$20.9 billion according to Forbes, is set to prompt investor interest in a potential restructuring of the group involving his stakes in key Samsung companies such as Samsung Life Insurance and Samsung Electronics.
It read: "It is with great sadness that we announce the passing of Kun-hee Lee, chairman of Samsung Electronics".
Samsung has also been under fire from groups including Elliott Management over chairman Lee's attempts to secure the financial future of Samsung for his son, Lee Jae-yong, who took over effective leadership of the conglomerate following the elder Lee's heart attack in 2014.
Lee was born on Jan 9, 1942, in a part of Korea occupied by Japan.
His father was convicted twice of charges related to bribery and tax evasion, though was pardoned on both occasions by the sitting president.
Lee Byung-chull was often called one of the fathers of modern industrial South Korea. He was freed in early 2018 after an appellate court reduced his term and suspended the sentence. Instead, financial struggles and worries about COVID-19 will limit the number of devices companies can make and how many phones people will actually buy. That puts Samsung, once the leader with the new connectivity, in third place.
In 1967, Lee Kun-hee married Hong Ra-hee.