Mr Kim, who has led the communist nation since the death of his father in 1994, died on a train while visiting an area outside the capital, the announcement said.
He suffered a stroke in 2008 and was absent from public view for months.
His designated successor is believed to be his third son, Kim Jong-un, who is thought to be in his late 20s.
North Korea's state-run news agency, KCNA, urged people to unite behind the younger Kim.
"All party members, military men and the public should faithfully follow the leadership of comrade Kim Jong-un and protect and further strengthen the unified front of the party, military and the public," the news agency said.
A funeral for Kim Jong-il will be held in Pyongyang on 28 December and Kim Jong-un will head the funeral committee, KCNA said.
The BBC's Lucy Williamson in Seoul says Mr Kim's death will cause huge shock waves across North Korea, an impoverished, nuclear-armed nation with few allies.
The announcement came in an emotional statement read out on national television.
The announcer, wearing black, said he had died of physical and mental over-work. A later report from KCNA said Mr Kim had had a heart attack.
South Korea's military has been put on alert following the announcement and its National Security Council is convening for an emergency meeting, Yonhap news agency reports.
Asian stock markets fell after the news was announced.
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