Nicknamed the Black Panther, Eusebio was regarded as one of the best players of all time and helped Portugal to third place at the 1966 World Cup, finishing as top scorer in the tournament with nine goals.
The Mozambique-born striker made his name at club level with Benfica, winning 11 league titles during a 15-year spell there and two Golden Boot awards as Europe's leading goalscorer.
He also notched 41 goals in 64 appearances for Portugal.
A spokesman for Benfica told Press Association Sport: "We have just received confirmation of the death of Eusebio.
"It's a very sad day for all of us."
The club were unable to confirm details of Eusebio's death but reports in Portugal say he died of a cardiac arrest in the early hours of Sunday morning.
He had been in poor health for some time and was hospitalised during Euro 2012 after suffering a heart scare in Poland.
Benfica fans will now be offered the chance to pay their final respects to the player at the Estadio da Luz later on Sunday.
"Eusebio's body will be brought to the stadium later today and all fans will be able to say goodbye," the spokesman said.
Eusebio was a torment to defenders because of his speed and technique, and scored an astonishing 317 goals in 301 appearances for Benfica, where he was a player between 1960 and 1975.
He then spent the twilight of his career in North America with spells at Boston Minutemen, Toronto Metros-Croatia, the Las Vegas Quicksilvers and New Jersey Americans until a series of knee injuries forced his retirement at the age of 37.
But it was his achievements with Benfica which made him a global star, with five national cup titles and a European Cup complimenting his list of league achievements.
Despite his prolific scoring record and international renown, his only appearance at a World Cup finals was in 1966 in England.
Two of Portugal's stars in recent years were quick to pay tribute to Eusebio as Luis Figo and Cristiano Ronaldo both took to Twitter to hail the achievements of the Benfica legend.
"The king! Great loss for all of us! The greatest!," wrote Figo, who retired in 2009 with a national record of 127 caps to his name, while current Portugal captain Ronaldo wrote: "Always eternal #Eusebio, rest in peace."
Football Association chairman Greg Dyke also paid his respects and compared the striker to modern-day equivalents Ronaldo and Lionel Messi.
"Every generation has great footballers," he told BBC News.
"He was clearly a world-class footballer who scored an awful lot of goals. He had a level of natural talent that most players don't have. He was the [Lionel Messi] or Ronaldo of his time."
Real Madrid confirmed they will hold a minute's silence at the Bernabeu ahead of Monday's league clash with Celta Vigo and that their players will wear black armbands in respect of Eusebio.
Current and former professionals from across the globe continued to mourn the loss, with Chelsea striker Samuel Eto'o calling Eusebio an "exceptional man".
"Africa, Portugal, the WORLD just experienced a great lost. Eusebio was not only a tremendous player..but also a exceptional man. RIP big bro," he wrote on Twitter.
Fellow Chelsea forward Fernando Torres wrote: "RIP Eusebio. One of t he all time greatest. #legend #eusebio #respect", while two-time world footballer of the year Ruud Gullit said: "A great footballer left us and I want to say thanks to Eusebio for all his greatness and beautiful football moments he gave us."
Former Manchester United goalkeeper Peter Schmeichel praised the work Eusebio had done for the sport since hanging up his boots, writing on Twitter: "Sad news that Eusebio has passed away, he was a true legend, a fantastic ambassador to football, a gentleman to the core. R.I.P. Sir."