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The Austrian took the title for Ferrari in 1975 and 1977 and McLaren in 1984.
He was badly burned in a crash in the 1976 German Grand Prix, but recovered and returned to racing. He was also a pilot and set up two airlines.
In January, he spent some 10 days in hospital while suffering from influenza. Last August, he had a double lung transplant.
"With deep sadness, we announce that our beloved Niki has peacefully passed away with his family on Monday," his family said in a statement.
RIP to one of the most phenomenal drivers to have ever raced in Formula 1. Niki Lauda dedicated the majority of his life to F1. A sport that nearly cut his life short back in 1976 when he suffered life threatening burns after a crash at the 1976 German Grand Prix.
If you wish to know more about his life and one of the most spectacular comebacks in sport history then I highly recommend watching the film 'Rush' which goes into detail about his entry to F1, the horrific crash, his comeback and also his intense rivalry with British F1 champion James Hunt