Alberta Health Services issued a news release on behalf of Klein's family indicating the former premier died on Friday.
Premier Alison Redford immediately issued a statement of condolences.
"Ralph was a staunch defender of our province as he had a deep and abiding love for Alberta and Albertans," Redford said in the statement.
"His passing is a loss to us all."
Klein, 70, had been in a Calgary care home since developing dementia and chronic lung problems.
His health deteriorated shortly after he retired as premier in 2006 after serving as Progressive Conservative leader for 14 years.
"The nature of his illness made it very difficult to express his thoughts these past years which I know was a real challenge for him, but Ralph very much knew and appreciated the well wishes and warm messages he received," said his wife, Colleen Klein, in the Alberta Health Services release.
During his time as premier, Klein introduced a number of austerity measures and privatization initiatives that, coupled with multibillion-dollar, oil-fuelled budget surpluses, eradicated Alberta’s accumulated $23-billion debt.
His cut-and-slash, damn-the-torpedoes philosophy — dubbed “The Klein Revolution” — changed the political tenor in Canada over deficit budgeting. His four successive majority governments proved that politicians who did what they promised and stayed the course could surmount the most divisive of policies.
It was the single biggest achievement of a politician marketed as a party-hearty man of the people known to many simply as "Ralph," but who was actually a complex individual of humble background and razor-sharp political instincts.
He was born in Calgary on Nov. 1, 1942. His father, Phil, was a working man and a pro wrestler from Rocky Mountain House, Alta., with family roots that reached back to Germany.
In his younger years, Klein moved around, dropped out of high school, tried the Air Force but quit, then went into business school public relations before joining the CTV affiliate in Calgary as a reporter.
It was during that time that he reported on the grinding poverty of the nearby Siksika First Nation. The experience galvanzied his determination to draw attention to the band's plight.
He never forgot. As premier he carried an eagle feather in his briefcase. In 1993, he was adopted into the Siksika Nation and given the name Otskoipiiksi, which means Bluebird.
He also covered city politics, but when he decided to run for mayor in 1980 against incumbent Ross Alger, he was considered the longest of shots.
He travelled around in a motorhome on a shoestring budget with his friend and political right-hand man Rod Love. Klein's grassroots message of change began to resonate.
He was only 37 when he won, but the man with the thick head of hair and perpetual spare tire, known for enjoying a few cold ones at Calgary’s low-rent St. Louis Hotel, would never lose a political contest again.
"Ralph" became larger than life, a leader who took many forms.
He was an action hero.
He spurred development and business partnerships in Calgary to elevate the city known as Cowtown into an international hub of commerce and culture. He blamed Calgary's rising crime problem on "creeps and bums" from eastern Canada.
He became a folk hero and a nationally known figure when as mayor, he presided over the Winter Olympics in 1988.
With Klein as an example — he was a child of divorce, a high school dropout from some of Calgary's meaner streets — everyone could believe he or she had a shot at becoming premier, no matter the circumstances.
He was controversial, likable and eminently quotable. When he made mistakes, he apologized and won sympathy from those who saw in him their own flawed humanity.
At his zenith, he became the conquering hero.
He balanced the budget and broadened the use of privatized services under the government umbrella. He brought his Progressive Conservative party back when it seemed poised to lose its grip on power in the election of 1993.
In 2001 his party won 74 of 83 seats and took almost two votes out of three. "Welcome to Ralph's World!" Klein announced to cheers in his victory speech.
As oil prices rose and billions of dollars rolled into the treasury, Klein announced in 2004 that the province had set aside enough money to pay off its debt.
Eventually the conquering hero turned into a tragic figure, done in by his demons and perhaps a bit of ennui.
He smoked like a chimney and had a drinking problem. His private affairs went public in 2001 when he drunkenly stumbled into an Edmonton homeless shelter, threw money at some of the people there and told them to get jobs.
And after slaying the debt three years later, he was a knight errant without a cause.
He became the controversial standard-bearer for more privatized health care to solve spiralling costs. Despite having the cash and political capital to spend, Klein would talk of change only to inexplicably retreat when protests would mount.
The health issue was not the only one he grappled with.
As billions of petro-dollars rolled in, so, too, did hundreds of thousands of newcomers looking to stake their claim or build a new life. They jammed roads and filled every last bit of rental housing. They spilled out of schools and lined up in hospitals.
Shortly before he retired as premier, Klein admitted he never had a plan for them. Infrastructure planning had been sacrificed to pay off the debt.
He planned to step down in 2007, but ended up leaving in 2006 after a tepid 55 per cent vote of confidence at a leadership review — a far cry from the days when he routinely scored support in the 90 per cent range.
After he left politics, he was rarely seen or acknowledged by his party. He spent his time delivering angry lectures to Calgary college students on the media’s shameful obsession with conflict and trivia.
Rock bottom came in 2010 when he presided over his own cable TV game show, sitting on a faux gold throne passing frank judgment on inane questions of public policy.
Klein is survived by his wife, Colleen, and five children.
He was named an officer of the Order of Canada in 2012, recognition seen as long overdue by some. Because of his illness, his wife accepted the award on his behalf.