The Local.se said she died Sunday after a long battle with Alzheimer's disease.
Born Lilian May Davies in Swansea, Wales, she moved to London when she was 18, and worked as a fashion model and actress.
During World War II, she was employed in a factory that made radio antennae for the navy and later in a hospital tending to wounded soldiers.
She married British actor Ivan Craig in 1940, but he was shortly afterwards dispatched to fight in the desert war against German Field Marshal Erwin Rommel's Africa Corps, The Local said.
Lilian met Sweden's Prince Bertil -- grandson of Gustav V and son of Crown Prince Gustaf Adolf -- in 1943 at a London nightclub but the couple kept their romance quiet for years, even after Lilian and Craig divorced in 1945.
Because of her status as a divorced commoner, Lilian wasn't permitted to attend official celebrations until the 1970s and she and Bertil weren't allowed to marry until 1976 after King Gustaf VI Adolf had died.
The couple received the blessing of the young new king, Carl XVI Gustaf, and Lilian was given the title Her Royal Highness Princess Lilian, Duchess of Halland. She then began attending royal engagements and became a popular and well-respected member of the Swedish royal family, The Local said.
After Bertil died in 1997, she continued working on behalf of organizations and charities that were important to him. She withdrew from public life in 2006 at the age of 91.