James Goldston, the president of ABC News, announced Nichols' death.
He described the filmmaker, who was married to ABC anchor Diane Sawyer, as a "true visionary".
"No one was more passionate about his craft than Mike," he added.
Nichols had apparently been working on a new project for HBO - an adaptation of Terrence McNally's Tony Award-winning play Master Class, based on the life of opera singer Maria Callas.
Meryl Streep was thought to have been involved in the production.
Born in Germany in 1931 as Mikhail Igor Peschkowsky, Nichols fled to the US after escaping Nazi Germany with his family at the age of seven.
His initial love for theatre grew when he attended the University of Chicago in the early Fifties and he later joined a comedy troupe with Elaine May - a partnership that became the catalyst to his career in the entertainment industry.
He is survived by his Diane, children Daisy, Max and Jenny, and four grandchildren.
A private service and a memorial is expected to take place this week.
Nichols collaborated with and influenced an array of show business legends. Here, friends and peers remember him:
"An inspiration and joy to know, a director who cried when he laughed, a friend without whom, well, we can't imagine our world, an indelible irreplaceable man." - Meryl Streep
"'Forward. We must always move forward. Otherwise what will become of us?' Said Mike Nichols, who changed the lives of those who knew him, who loved him, who will miss him so." - Tom Hanks
"Mike was a friend, a muse, a mentor, one of America's all-time greatest film and stage directors, and one of the most generous people I have ever known. For me, The Graduate was life altering both as an experience at the movies as well as a master class about how to stage a scene. Mike had a brilliant cinematic eye and uncanny hearing for keeping scenes ironic and real. Actors never gave him less than their personal best and then Mike would get from them even more. And in a room full of people, Mike was always the center of gravity. This is a seismic loss." - Steven Spielberg
- The Independent and AP
