Officials said Simoncelli was sent to the medical center at the Sepang circuit for treatment.
"He was already unconscious when the medical team arrived. We attempted to resuscitate him but failed. He died 45 minutes later," said MotoGP medical director Michele Macchiagodena.
The race, the second last of the season, was canceled.
Simoncelli lost control of his Honda at turn 11 four minutes into the race, but his bike regained partial grip and swerved across the track, straight into the path of American Colin Edwards and Valentino Rossi of Italy.
Simoncelli's helmet was ripped off in the incident and he lay motionless on the track after the collision. He had been fourth at the end of the first lap. The other two riders were unhurt.
Race director Paul Butler pledged to investigate the circumstances surrounding the accident.
Sepang circuit chairman Mokhzani Mahathir voiced his condolences and said it was unfortunate that a death occurred for the first time since the circuit opened in 1999.
"We had our standard operating procedure ... this is one-of-a-kind freak incident where the helmet came off and I am sure (motorcycling body) FIM and MotoGP will be looking into this," he said.
Newly crowned MotoGP champion Casey Stoner said after the crash that he feared for Simoncelli.
"As soon as I saw the footage it just makes you sick inside," the Australian told the British Broadcasting Corporation. "Whenever the helmet comes off that's not a good sign." Simoncelli's death comes a week after British racing driver Dan Wheldon was killed in a multi-car pile-up at the Las Vegas Motor Speedway. It was the first fatality in MotoGP since Japan's Daijiro Katoh died from injuries sustained at the 2003 Japanese Grand Prix.
It also raised the number of recorded deaths in MotoGP to 47 since it was founded in 1949, according to a MotoGP official.
Last year, Japanese teenager Shoya Tomizawa died after crashing in a Moto2 race at San Marino.
The Italian motorcycling federation canceled all events planned for Sunday at the Mugello circuit near Florence.
The Italian Olympic Committee said it would honor Simoncelli by requesting a minute of silence at all Sunday's football matches, with AC Milan, his favorite football club, planning to don armbands in his memory.
Italian Olympic Committee president Gianni Petrucci, said Sunday marked the saddest day of his presidency.
"Life is sacred; you shouldn't die at age 24 just for a race," ANSA news agency quoted him as saying.
British MotoGP rider Cal Crutchlow wrote on Twitter: "RIP Marco Simoncelli ! A great rider and all round nice guy. My thoughts are with all his family & friends. I will never forget today." Formula One driver Mark Webber tweeted: "Rhode IslandP Marco A special talent that will be missed... Thinking of your loved ones, and all the motogp paddock..mark."
