Benedetti died at his home in Uruguay's capital, Montevideo, personal secretary Ariel Silva said. He had suffered from respiratory and intestinal problems for more than a year, and had been released from a hospital on May 6.
Called "Don Mario" by his friends, the mustachioed author penned more than 60 novels, poems, short stories and plays, winning honors including Bulgaria's Jristo Borev award for poetry and essays in 1985, and Amnesty International's Golden Flame in 1986. In 1999 he won the Queen Sofia prize for Iberoamerican poetry.
His writings on love, politics and life in Uruguay's capital were turned into popular songs and a movie, and his readings in his homeland attracted sold-out crowds.
"I don't think we should be talking of a loss, because he will be with us forever," Culture Minister Maria Simon told local media on Sunday.
Benedetti's 1960 novel "The Truce" was translated into 19 languages and along with "Thank You for the Fire" (1965), heralded his inclusion in the Latin American literary boom in the 1960s along with Colombia's Gabriel Garcia Marquez, Peru's Mario Vargas Llosa and Mexico's Carlos Fuentes.
While Benedetti was renowned throughout Latin America, he never attained the other authors' popularity in the English-speaking world.
Benedetti leaned to the political left and firmly defended the Cuban revolution to the end of his life. In 2006, he joined other Latin American leftist authors in a call for Puerto Rican independence.
The son of Italian immigrants, Benedetti was born on Sept. 14, 1920, in the city of Paso de los Toros. In 1973 he joined thousands of other Uruguayans fleeing the nation's military dictatorship, spending 12 years in exile in Havana, Madrid, Lima and Buenos Aires.
"I think the only positive thing that came from Uruguay's dictatorship was the spread of Montevideo natives around the world, and I continued writing about them from my various places of exile," he once said.
Later in life, Benedetti would eat lunch most days at a restaurant a few feet (meters) from his house in Montevideo along with his brother Raul and Avila, his secretary. Strangers would approach the author at this table and often ask for his autograph.
"Whether or not you liked his books, he was an admirable person who fought for his ideas and kept writing to the end," said his habitual waiter, Miguel Braga.
Among his other major works were "Wind from Exile," "Montevideans" and his essay "The Latin American Writer and the Possible Revolution."
In 1959, Benedetti traveled to the United States despite concerns by authorities about his ties to a leftist newspaper. He recalled that he had to sign a pledge not to assassinate the U.S. president.
Politically active, he was a leader of the March 26 Independence Movement, which joined the Broad Front leftist coalition that took power in Uruguay in 2005.
A widower, Benedetti left behind no wife or children.