Tauscher's family announced her death in a Facebook post, stating that she "lost the battle against pneumonia," which she became ill with in January.
"It is with the greatest sadness in our hearts that we announce the passing of our beloved mother, sister, aunt and friend, Ellen O'Kane Tauscher," her family wrote. "Ellen died peacefully surrounded by her loving daughter Katherine and the rest of her family."
An earlier post from April 7 stated that Tauscher had also been experiencing complications from her 2010 surgery for esophageal cancer.
Tauscher was born in Newark, N.J., on Nov. 15, 1951, and worked as an investment banker and stock broker before entering politics, becoming one of the first and youngest women to hold a seat on the New York Sock Exchange at the age of 25.
"Ellen broke barriers for generations of women that followed her into the male-dominated world of finance," her family wrote.
She was elected to the U.S. House to represent California's 10th Congressional District in 1996, defeating Republican Bill Baker.
Throughout her seven terms in the House, Tauscher held a number of leadership positions including chairing the Strategic Forces subcommittee of the Armed Services Committee.
After serving in the House, Tauscher was appointed by Obama to serve as undersecretary of state for Arms Control and International Security Affairs in 2009, where she worked under former Secretary of State Hillary Clinton.
During her time in the State Department, she played a key role in negotiating the New Strategic Arms Reduction Treaty with Russia in 2010.
"Ellen woke up every day determined to make a difference and make a difference she did," Clinton said in a statement. "She was fearless, brilliant and bighearted. When she walked into a room, it lit up. Her friendship forever enriched our lives."
Upon departing from the State Department after three years, she officially retired from public service but continued to serve as the chairwoman of California Gov. Jerry Brown's Military Advisory Council and chairwoman of the board of governors for Livermore and Los Alamos labs.