According to a statement released by Vasaloppet organizers, the skier died early Saturday, surrounded by members of his family. The cause of death was not immediately available.
Born in 1917, in the small town of Mora in central Sweden where the 90-kilometre (56-mile) long Vasaloppet finishes, Karlsson became known to Swedes as "Mora-Nisse." Coming from a relatively poor family, he started work at the age of 12. In 1948 he married his wife Ulla-Britta Green.
Karlsson is one of only three people to have won the Vasaloppet at least three times in a row since the race was inaugurated in 1922.
Karlsson had 17 individual competition wins in Swedish national championships and won a bronze medal in the 50 kilometre race at the 1950 FIS Nordic World Ski Championship.
"He became a loved star not only for his accomplishments, but also for his kind ways," the organizers said.
Vasaloppet is one of the longest and oldest cross-country races in the world and is based on the attempt by Gustav Vasa in 1522 to gather peasants for a revolt against the occupying Danes. Vasa fled when he got no support. The people of Mora changed their minds and sent their two best skiers to bring Vasa back, and they found him near Salen.
Vasa returned to lead the Swedes to independence, and was later proclaimed king. The Vasaloppet follows the same course from Salen to Mora.
Karlsson, who won the race in 1943, 1945-1951 and 1953, is survived by his daughters Karin Green and Marianne Karlsson-Eriksson. Funeral arrangements were not immediately known.