Craxi, once a major political kingpin and one of Italy's longest-serving premiers, had been in poor health for years, suffering from complications of diabetes.
His son, Bobo, confirmed Craxi's death. Craxi's lawyer, Giannino Guiso, said the former leader died at his seaside villa in Hammamet, Tunisia, of a heart attack. Family members found him dead in his bed, the lawyer said.
The Italian Senate and Chamber of Deputies, upon hearing the news, immediately suspended its session.
Craxi fled Italy in 1994 to avoid a 5 1/2-year prison sentence for political corruption.
He fell ill in October and was hospitalized in Tunis, the Tunisian capital. On Nov. 30, doctors removed his right kidney.
Once one of Italy's most powerful postwar politicians, Craxi served as premier from August 1983 to March 1987.
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