PTI said Devsaab, who millions of his fans felt would live forever, died of a heart attack.
He was 89.
The last rites will be conducted in London.
Devsaab, who had traveled to London for a medical check up, was not keeping well for the last few days, family sources told PTI. His son Sunil Anand was with him when he passed away.
Dev Anand made his debut as an actor in 1946 in Hum Ek Hain. By the time his Ziddi was released in 1947 he was a superstar and never looked back.
Among his countless hits were Paying Guest, Baazi, Jewel Thief, CID, Johny Mera Naam, Amir Garib, Warrant, Hare Rama Hare Krishna and Des Pardes.
For his outstanding contribution to Indian cinema, Dev Anand was honoured with the Padma Bhushan in 2001 and the Dadasaheb Phalke Award in 2002.
He established his film production company Navketan International Films in 1949 and produced more than 35 movies.
Dev Anand won two Filmfare Awards in 1958 for Kala Paani and in 1966 for Guide.
Guide won Filmfare Awards in five other categories including Best Film and Best Director and was India’s entry for the Oscars in the foreign film category that year.
In 1993, he received a Filmfare Lifetime Achievement Award and in 1996 he received a Screen Videocon Lifetime Achievement Award.
Devsaab was involved with a new project Song Of Life – he was to play the central character – when he died.
Devsaab’s late brothers Chetan Anand and Vijay Anand were also movie directors. Their sister Sheel Kanta Kapur is director Shekhar Kapur’s mother.