Buckingham Palace announced the heartbreaking news on Thursday, bringing Her Majesty’s 70-year reign to an end.
The flag at the Palace was lowered to half mast at 6.30pm.
People among the crowd gathered outside the gates began crying and taking pictures as a single helicopter circled the skies above.
Her eldest son, Charles, 73, will now ascend the throne after being the longest-serving Prince of Wales in history.
A Buckingham Palace statement reads: “The Queen died peacefully at Balmoral this afternoon.
"The King and The Queen Consort will remain at Balmoral this evening and will return to London tomorrow.”
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The Queen pictured in the Balmoral drawing room earlier this week
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The Royal Family’s official website now carries the message “Queen Elizabeth II 1926 – 2022” along with the official statement issued by Buckingham Palace.
A statement on the site says: “The official website of the Royal Family is temporarily unavailable while appropriate changes are made.”
The flags in Downing Street were lowered to half mast at 6.36pm following the Queen’s death.
Buckingham Palace is expected to announce plans for the Queen’s funeral, due to be held 10 days from now, later.
The Ministry of Defence will arrange for gun salutes to take place at all saluting stations, and a national minute’s silence is also due to be announced.
A small service of remembrance is expected take place at St Paul’s Cathedral.
It comes after the head of state pulled out of a virtual Privy Council on Wednesday after doctors ordered her to rest.
Her Majesty has had ongoing mobility issues and looked bright but frail earlier this week.
She used a walking stick during Tuesday’s historic audience with Ms Truss, which followed a visit from outgoing Prime Minister Boris Johnson as he tendered his resignation.