"With infinite sorrow, the Armani Group announces the passing of its creator, founder and tireless driving force: Giorgio Armani," the fashion house said in a statement.
Armani died at home, the company said.
Armani, who was 91, was synonymous with modern Italian style and elegance.
He dressed celebrities including Cate Blanchett, Julia Roberts, George Clooney and Lady Gaga.
He combined the flair of the designer with the acumen of a businessman, running a company that turned over 2.3 billion euros ($A4.1 billion) a year.
Armani also owned several bars, clubs, restaurants and his own basketball team EA7 Emporio Armani Milan, better known as Olympia Milano.Â
He opened more than than 20 restaurants from Milan to Tokyo since 1998, and two hotels, one in Dubai in 2009 and another in Milan, in 2010.
Having initially studied medicine, Armani moved into fashion during the 1960s and set up his own label alongside his partner Sergio Galeotti in 1975, which became known for luxury in both men's and women's wear.
The designer's career spanned almost six decades, with his brand becoming a household name after its reinvention of power dressing gained global attention in 1980 when he dressed Richard Gere in American Gigolo.
He had been unwell for some time, and was forced to drop out of his group's shows at Milan's Men's Fashion Week in June, the first time in his career that he had missed one of his catwalk events.
Known as "Re Giorgio" - King Giorgio - the designer was known for overseeing every detail of his collection and every aspect of his business, from advertising to fixing models' hair as they head out on to the runway.
"I design for real people. There is no virtue whatsoever in creating clothes and accessories that are not practical," he liked to say when asked to identify his clientele.
A funeral chamber will be set up on Saturday and Sunday in Milan, the company said, followed by a private funeral at an unspecified date.
with AP and PA
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