Saramago, a card-carrying member of Portugal's Communist Party who won the Nobel prize in 1998, was known for combining magical realism with hard-edged political comment, often harshly criticizing Portuguese history, conservatism and religion.
The Saramago Foundation said he had died of multiple organ failure after a prolonged illness.
"I think this is a great loss for Portuguese culture," Prime Minister Jose Socrates told journalists. "His works have made Portugal proud, his death will leave our culture poorer."
Saramago, who had courted controversy throughout his long career, angered the Catholic Church last year when he said at the launch of his last book, Cain, that the Bible was "a handbook of bad morals" and a "catalogue of what is worst in human nature."
Saramago went into self-imposed exile in 1992 after the Portuguese government excluded his novel "The Gospel according to Jesus Christ" from a list of official recommendations for a literary prize. He had lived in Lanzarote since then.
The novel, which depicts Jesus as the son of Joseph, not God, had come under fire from the Vatican and Saramago accused the Portuguese government of censorship.
