A statement distributed by Taliban spokesman Zabiullah Mujahid to journalists said Jalaluddin Haqqani passed away "after a long battle with illness," adding he had been "ill and bed-ridden for the past several years."
He passed operational control of the network to his son Siraj many years ago, who then became the number-two ranked commander in the Taliban.
The Haqqani network was formally designated a terrorist organization by the United States in 2012.
The network, which is based in Waziristan, a tribal area of Pakistan, is linked with both the Taliban and al Qaeda. It also operates across the border in Afghanistan.
It is not clear from the statement when Haqqani died.
His death has been reported and speculated on over the years but this is the first time the Taliban have released an official statement confirming his death.
Tawab Ghorzang, director of Public Affairs at the office of National Security Council of Afghanistan, tweeted that according to government sources Haqqani died "back in 2007."
He added that it should "be carefully seen that what is the agenda of Taliban behind this announcement. It is obviously a part of their Psychological Warfare tactics."
CNN has been unable to reach Haqqani's immediate family for comment.
'The Sopranos of the Afghanistan War'
The network, which is essentially a family -- it was called "the Sopranos of the Afghanistan War" by the New York Times in 2011 -- has been an effective fighting force in the region for most of the past 30 years.
Their calling card is bold and complex suicide bombings, including high-profile attacks on US and foreign personnel and assassinations of high level people in Kabul and northern Afghanistan, the Institute for the Study of War reports.
The Haqqanis maintain legal businesses (like car dealerships and construction companies) and illegal business interests from Afghanistan and Pakistan and areas in the Persian Gulf and beyond, the Institute found. It also runs import-export operations and has commercial and residential real estate holdings.
Mujahideen
The Haqqani Network's roots go back to Jalaluddin's emergence as a skilled fighter in Afghanistan's war against the Soviets in the 1980s.
The family is part of the Zadran tribe, which spans the Afghanistan-Pakistan border and stretches to Khost province. The United States military has described the Zadrans as warrior-oriented especially proud of trouncing their enemy in that war.
Jalaluddin garnered an impressively tough reputation as a mujahideen fighter at that time. Later, at the head of his terror group, he was described by several US officers as a "mafia godfather," according to defense analysts Jane's in June 2009.
He developed a relationship in the mid-1990s with Osama bin Laden when bin Laden began living in Afghanistan, according to bestselling Pakistani journalist Ahmed Rashid, who is regarded as one of the world's top experts on al Qaeda, the Taliban and Afghanistan.
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