The actress died of congestive heart failure in the early hours of this morning.
Taylor's publicist Sally Morrison said in a statement: "She was surrounded by her children - Michael Wilding, Christopher Wilding, Liza Todd and Maria Burton."
Her son Michael added: "My mother was an extraordinary woman who lived life to the fullest, with great passion, humour and love.
"Though her loss is devastating to those of us who held her so close and so dear, we will always be inspired by her enduring contribution to our world."
He continued: "Her remarkable body of work in film, her ongoing success as a businesswoman, and her brave and relentless advocacy in the fight against HIV/AIDS, all make us all incredibly proud of what she accomplished.
"We know, quite simply, that the world is a better place for mum having lived in it. Her legacy will never fade, her spirit will always be with us, and her love will live forever in our hearts."
Taylor had been admitted to Cedars-Sinai Medical Centre in Los Angeles in January for her heart condition. Her condition was reported to have been improving last month.
The actress won the Academy Award for 'Best Actress' in 1960 for BUtterfield 8 and again in 1966 for Who's Afraid of Virginia Woolf?.
She starred opposite Richard Burton in 1963 movie Cleopatra and the pair developed a relationship on set and married in 1964. She was married eight times in total, including a second time to Burton in 1975.
Taylor is survived by ten grandchildren and four great-grandchildren.
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