A spokesman for her foundation said that Johanna Quandt passed away peacefully on Monday, German time, at the age of 89, in the town of Bad Homburg, outside of Frankfurt.
At the time of her death, Johanna Quandt held a 16.7 percent stake in BMW. Together with her children — Stefan Quandt, who owns 17.4 percent, and Susanne Klatten, who has 12.5 percent — the Quandt family controls almost 47 percent of the Bavarian company.
A spokesman told Bloomberg that her stake will remain within the family, although he did specify how it would distributed.
In a statement overnight confirming her death, Harald Krueger, BMW's CEO, said: "Johanna Quandt worked on behalf of the BMW Group for more than 50 years, bringing enthusiasm and passion to the company. She gave the company support and security."
Johanna Quandt and her children's holdings in BMW came about on the passing of Herbert Quandt in 1982. Herbert Quandt and his half-brother inherited a small stake in BMW, and many other industrial firms, when their father passed away in 1954.
The pair also inherited stakes in a number of industrial firms, which, it was revealed in 2007, produced weaponry for the Nazi regime and employed forced labourers.
In 1959, the German aircraft and car company was careening towards bankruptcy, and was on the verge of a takeover from Daimler, maker of Mercedes-Benz vehicles. Moved by the pleas of BMW's employees, and against the advice of his bankers, Quandt purchased around 50 percent of BMW and began implementing a turnaround plan that included heavy investment in new models.
Mrs Quandt was born to Berlin-based art historians in 1926 as Johanna Bruhn. She gained a medical technology apprenticeship, but this was interrupted by World War II. After the war she worked a secretary and joined Herbert Quandt's office in the 1950s; the two were married in 1960. Johanna Quandt served on BMW's supervisory board between 1982 and 1997.
In the estimation of Forbes magazine, her fortune was worth around US$11.8 billion ($16.2 billion). Known for fiercely protecting her privacy, Johanna Quandt setup an eponymously-titled foundation in 1995 to administer to her wealth. The foundation is known for its support of young business journalists, as well as its investments in medical research.