Caballe's family has reportedly requested the cause of death not be released, though revealed she had been in hospital since last month.
Montserrat had been staying in the Barcelona hospital since September after entering because of a gall bladder problem.
Spanish tenor Jose Carreras said she possessed a voice of great range, combined with a flawless technique.
Spain opera star Montserrat Caballe died overnight at the Sant Pau hospital.
The opera star, who was accepted for tuition in a Barcelona music conservatory as a child, had her worldwide breakthrough in 1965, in a performance of Lucrezia Borgia at the Carnegie Hall in NY.
Known for her tone, stunning control, and ability to master new parts, Caballe gained popularity for her down-to-earth personality and light-hearted demeanor.
During her career she was awarded several national and global awards.
Caballe made a global splash when "Barcelona", her song with Queen singer Freddie Mercury, became the anthem for the 1992 Olympic Games.
Caballe performed the song live, accompanied by a recording of the late Mercury, at the 1999 UEFA Champions League soccer final in Barcelona's Camp Nou stadium. "Her voice and her kindness will always remain with us".
In 1997, she sang on two tracks on an album by New Age composer Vangelis. She had failed to pay the Spanish treasury more than 500,000 euros in taxes on her earnings.
Born in April 1933 to a humble family in Barcelona, Maria de Montserrat Viviana Concepcion Caballé i Folc studied music at the Liceu Conservatory in the Catalan capital. She also established a foundation for needy children in Barcelona.