The Ministry of Presidential Affairs announced the death of Khalifa, who was also ruler of the UAE's richest emirate, Abu Dhabi, but gave no details.
Khalifa, born in 1948, had rarely been seen in public since suffering a stroke in 2014. Funeral prayers will be held on Friday, state news agency WAM said.
"The UAE has lost its righteous son and leader of the 'empowerment phase' and guardian of its blessed journey," his half-brother and Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed said on Twitter, praising Khalifa's wisdom and generosity.
Mohammed, known as MbZ, has for years been the de facto ruler of the UAE, an OPEC oil producer and a major trade and tourism hub which has moved to build its political influence in the region and abroad.
MBZ is poised to become the new ruler of Abu Dhabi, which holds most of the UAE's oil wealth and has held the presidency since the founding of the UAE federation by Khalifa's father, the late Sheikh Zayed bin Sultan al-Nahyan, in 1971.
Under the constitution, vice-president and premier Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai, would act as president until the federal supreme council which groups the rulers of the seven emirates meets within 30 days to elect a new president.
Diplomats and analysts expect MbZ to become new president, further consolidating Abu Dhabi's power which had already grown under Khalifa, who came to power in 2004.
Khalifa's death comes at a time when Abu Dhabi's ties with Washington have been visibly strained over perceived U.S. disengagement from its Gulf allies' security concerns.
"Not much will change in UAE foreign & domestic policies, except MbZ will have even less reason to seek consensus w/Dubai & other Emirates," tweeted Cinzia Bianco, research fellow at European Council on Foreign Relations.
MbZ led a realignment of the Middle East that created a new anti-Iran axis with Israel and fought a rising tide of political Islam around the region.
U.S. President Joe Biden described Khalifa as a "true partner and friend of the United States" and said in a statement that the U.S. would continue strengthening its ties with the UAE.
The UAE forged ties with Israel in 2020 and Israeli Prime Minister Naftali Bennett said: "The legacy and great deeds of Sheikh Khalifa were greatly appreciated in Israel."
Iranian Foreign Minister Hossein Amirabdollahian, whose country has often had tense relations with the UAE, sent a letter of condolences to his Emirati counterpart, Iran's state media said.
At home, Emirati citizen Ali Al Khatri said Khalifa would be remembered for his push to develop the country, which has a population of some 10 million, the majority expatriate workers.
"We will remember him like our father," Khatri, 32, told Reuters in Abu Dhabi.
The UAE announced a 40-day mourning period with flags flown at half-mast and suspended work at all public and private sector organisations for three days.