"Iain died in the early hours this morning," the writer's wife Adele wrote in a message posted on Banksophilia, a website set up to provide updates on Banks. "His death was calm and without pain."
Banks, born in Dunfermline, best known for "The Wasp Factory," "The Crow Road" and "Complicity," was "an irreplaceable part of the literary world," his publisher, Little, Brown Book Group, said in a statement reported by the BBC.
"Iain Banks' ability to combine the most fertile of imaginations with his own highly distinctive brand of Gothic humor made him unique," the company said.
Banks had wanted his newest book, "The Quarry," to be released in time for him to see it in print. It's set to be available June 20.
The BBC said the book will deal with the physical and emotional strain of cancer as seen through a man in his 40s with terminal cancer.
Banks had told the BBC he had already written 87,000 words of the story before he learned he had cancer.
"I had no inkling. So it wasn't as though this is a response to the disease or anything, the book had been kind of ready to go," he said.
"And then 10,000 words from the end, as it turned out, I suddenly discovered that I had cancer."