Michael, who shot to fame as the front man of Wham! in the 1980s, died peacefully at his home in Oxfordshire, his publicist said.
His manager Michael Lippman said the cause of his death was heart failure, according to the Associated Press.
Thames Valley Police said officers were called to a property in Goring-on-Thames shortly before 2pm on Christmas Day.
The force said: "Sadly, a 53-year-old man was confirmed deceased at the scene.
"At this stage the death is being treated as unexplained but not suspicious.
"A post-mortem will be undertaken in due course."
Michael's publicist said: "It is with great sadness that we can confirm our beloved son, brother and friend George passed away peacefully at home over the Christmas period.
"The family would ask that their privacy be respected at this difficult and emotional time."
Michael - whose real name was Georgios Kyriacos Panayiotou - had hits including Club Tropicana and Last Christmas as a part of Wham!
He sold more than 100 million albums throughout a career spanning almost four decades.
People reacted with shock on social media, with his former Wham! bandmate Andrew Ridgeley leading tributes.
He tweeted: "Heartbroken at the loss of my beloved friend Yog. Me, his loved ones, his friends, the world of music, the world at large. 4ever loved. A xx"
Sir Elton John said he was "in deep shock" at Michael's death.
The pair famously collaborated on a rendition of Elton's classic Don't Let The Sun Go Down On Me, released in 1992.
Writing on Instagram, Sir Elton said: "I have lost a beloved friend - the kindest, most generous soul and a brilliant artist.
"My heart goes out to his family and all of his fans."
"All our love and sympathy to @GeorgeMichael's family."
As well as being known for his musical talent, Michael had a turbulent personal life, and brushes with the law and tales of drug use saw him hit the headlines.
Michael nearly died from pneumonia in late 2011.
He received treatment in a Vienna hospital, after which he made a tearful appearance outside his London home and said it had been "touch and go" whether he lived.
Surgeons had performed a tracheotomy to keep his airways open and he was unconscious for some of his time in hospital.
Michael's 1990 album Listen Without Prejudice Vol. 1 had been set to be reissued.
It was due to be accompanied by a new film featuring Stevie Wonder, Elton John and the supermodels who starred in the video to his hit single Freedom! '90.