The former Llanelli, Wales and British and Irish Lions centre had been on holiday with his family in Mallorca.
The Welsh Rugby Union announced the news tonight and paid tribute to Gravell "as a man who epitomised the passion, flair and dignity of his beloved Welsh nation".
Gravell made his debut for Wales against France in 1975, three years after helping Llanelli to their famous win over New Zealand.
He made 23 appearances for Wales, winning Grand Slams in 1976 and 1978, and played all four Tests on the Lions' tour of South Africa in 1980.
After retiring as a player in 1985, Gravell became president of Llanelli RFC and the Llanelli Scarlets. He forged a career as an actor and a respected rugby broadcaster, for S4C and the BBC.
Earlier this year, Gravell had his right leg amputated below the knee following complications linked with his diabetes but he had been recovering well.
In August, Gravell was invited to announce the Wales World Cup squad and he had been due to present the jerseys to the players ahead of the Test against South Africa on November 24.
WRU chief executive Roger Lewis said: "We are all in total shock because Ray was so full of life even through the difficult health problems he suffered recently.
"He was a wonderful ambassador for rugby and for Wales and a great example of how the game can bring out the best in a man.
"As a player, he always gave a huge amount of respect to his opponents but never gave an inch of ground to anyone he faced on the field of play.
"It is a measure of the man that he forged rugby friendships which lasted long after his playing days up until the present day.
"Most recently, he stayed close to rugby as a broadcaster and was always in the tunnel to greet the teams with a handshake and a hug before and after big games.
"It is typical of the man that he became part of the tradition of our game and he was delighted when we asked him to present the jerseys to the Welsh players in the changing rooms before Wales play South Africa at the Millennium Stadium later in November.
"Before the Rugby World Cup, it was Ray who came to the Stadium with his wife (Mari) and children to announce the names of the Welsh squad to the media.
"He was the right man for that role because of the pride and passion he clearly displayed when he read out the list of names.
"We will miss him as a rugby legend but more importantly, we will miss Ray as a great friend and a fine, family man."
In 2003, the road where Gravell lived in Mynyddygarreg was named after him. It became Heol Ray Gravell.
WRU chairman David Pickering, who was captained by Gravell at Llanelli, said: "Ray was an inspiration both on and off the field and he will never be forgotten by anyone who truly loves this game of ours.
"He was renowned for his passion and strength of character and it was always reassuring to know Ray was in the line-up and on our side.
"A lot will be said in tribute to the way Ray approached the game but it must also be remembered that he was a great and skilful player who deserved all the top honours which came his way.
"He set an example which should be followed by any youngster who wants to play rugby in a way which will make them a better and stronger human being.
"He epitomised all the best elements of the game of rugby and he will be sadly missed, not just in the world of rugby but by everyone who knew him."