During his seven-decade career he won huge acclaim and is best known for his mid-1960s suite inspired by the Dylan Thomas drama Under Milk Wood, but he was still managing to impress new audiences with his regular concerts into his 80s.
He was nominated for the Mercury Prize in 1993 for his album Portraits Plus, missing out to rock act Suede, and released his latest album just months ago.
His death was announced by his son, the jazz drummer Clark Tracey, who said: "Stanley William Tracey passed away peacefully this afternoon. Finally the pain has gone and he can rest in peace."
A message on the pianist's website said: "After a struggle with illness, he passed away having recently celebrated his 70 year professional career as a jazz pianist/composer.
"He is survived by a family who love him, and will miss him profoundly. His legacy is the generations of musicians young and old, past and future who have his influential example to look to."
Last year Tracey was given a special honour at the Ivor Novello Awards, which recognise songwriters and composers, and he was honoured for his contribution to jazz.
He was brought up in Tooting, south London, and he made his first efforts as a musician in his mid-teens by learning the accordion, entertaining troops at the age of 16. In 1944 he transferred to the piano, fired up by the recordings of boogie woogie acts.
After serving in the RAF, he encountered Ronnie Scott who encouraged his jazz direction. Throughout the '50s he worked with figures such as Kenny Baker, Basil Kirchin and a number of small combos, as well as having a stint in the Ted Heath Orchestra.
As resident pianist in Scott's famous Soho club in London, he played with the greats from a golden era including Sonny Rollins, Ben Webster and Stan Getz.
After his 1965 Under Milk Wood release, he went on to play with Rollins on the soundtrack to the movie Alfie starring Sir Michael Caine and releasing another of his best known works Alice In Jazzland, fronting his own big band.
In later years his work included teaming up with Keith Tippett and even joining the big band assembled by Rolling Stones drummer Charlie Watts. He was given a Parliamentary Jazz Award for his services to his chosen field earlier this year and released his most recent compositions on a CD, The Flying Pig, in August which were inspired by a visit to First World War battlefields.
Fellow jazz pianist and broadcaster Jamie Cullum said: "He played like a demon right up until his last days on earth as an eightysomething."