Cardinal Giovanni Battista announced the Pontiff’s death to tens of thousands of people gathered in St Peter’s Square.
“Our beloved Father John Paul II has returned to the house of his Father.
Let’s pray for him,” the Cardinal said.
Initially the crowd fell silent. Some then clapped in tribute.
Vatican officials said the 84-year-old pontiff died at 2137 local time (1937 GMT) following a series of worsening health problems including heart failure.
They said his final hours were marked by uninterrupted prayer.
Tens of thousands of Italians and foreigners were streaming into St Peter’s Square to pray for him.
The Pope was last seen at the window of his apartment on Wednesday, severely weakened and speechless with a crippling array of health problems.
A round-the-clock vigil started on Friday, when the Vatican announced the Pope had suffered heart failure and septic shock.
On Sunday, in honor of Pope John Paul II’s memory, the mass to celebrate the Feast of the Divine Mercy will be celebrated in St. Peter’s Square.
The Vatican said the pope’s body was expected to be brought to St Peter’s Basilica to lie in state no earlier than Monday afternoon.
His body will be laid to rest in the crypt beneath the Basilica.
The College of Cardinals will meet on Monday in advance of the process to decide John Paul’s successor.
After the official nine-day mourning period ends, the cardinals will hold a secret vote in the Sistine Chapel to choose a successor.
According to Vatican tradition, the process will begin no later than 20 days following the pope’s death.