Officers were called to his home on Mulholland Drive in Bel Air, the Los Angeles Police Department said, while his family said he was surrounded by his loved ones when he passed away.
"It is with great sadness that we announce the passing of Vidal Sassoon CBE, who died this morning at his home in Los Angeles," said a family statement, adding that he "sadly lost his battle with leukaemia today".
"He became the most celebrated hairdresser in the world," it said, adding that he revolutionised "an industry through his iconic haircuts, salons, schools and product lines."
Referred to by some as the "founder of hairdressing," Sassoon, who grew up in England, is said to have pioneered the bob haircut and, after opening his first salon in London, launched a network of outlets around the world.
The flamboyant hairstylist, who launched a successful hair-care product range with the slogan "If you don't look good, we don't look good," had lived in the United States since the 1980s.
He was famed for so-called "wash and wear" cuts, easy to maintain, as opposed to the rigid hairstyles of earlier eras.
"When I first came into hair, women were coming in and you'd place a hat on their hair and you'd dress their hair around it," he told the LA Times in a 1999 interview.
"We learned to put discipline in the haircuts by using actual geometry, actual architectural shapes and bone structure. The cut had to be perfect and layered beautifully, so that when a woman shook it, it just fell back in."
Born to Jewish parents in London, Sassoon spent seven years in a Jewish orphanage after his father, Jack Sassoon, abandoned his family for another woman, according to the IMDB movie industry website.
He was evacuated to the English countryside during World War II, and fought for Israel in the Arab-Israeli War in 1948. He later founded the Vidal Sassoon International Study for Anti-Semitism.
Sassoon opened his first salon in 1954 in London, and his career took off in the swinging 60s, when his clients included Mia Farrow for Rosemary's Baby in 1968 and Glenda Jackson for her Oscar-winning role in 1969's Women in Love.
A 2010 documentary Vidal Sassoon: The Movie explored his life from London's impoverished East End via an orphanage to his fame and fortune as hairdresser to the stars.
Sassoon, who married four times, was awarded the Commander of the Order of the British Empire (CBE) in the 2009 Queen's Birthday Honours List for his services to British hairdressing and charity.
He was a life-long fan of Chelsea Football Club.
Sassoon is survived by his wife of 20 years Rhonda and three children from a previous marriage.
In lieu of flowers his family has requested asked that memorial donations be sent to American Friends of The Hebrew University in support of The Vidal Sassoon International Center for the Study of Anti-Semitism.
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