He was 86. Contreras had been hospitalised September 26 because of kidney problems and was later moved to the intensive care unit when his condition degenerated.
Soon after the death was confirmed by the government, a small crowd of several dozen people gathered outside the Santiago hospital waving Chilean flags. They broke into changes of "Murderer!" and toasted with champagne in paper cups to celebrate his death.
Born on May 4, 1929, in Santiago, Contreras was a career military man who also helped organize Operation Condor, a coordinated effort formed in the mid-1970s by South America's dictatorships to eliminate dissidents who sought refuge in neighboring countries.
Contreras was among Pinochet's closest confidants early on, but the pair exchanged accusations in their final years.
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According to an official report, 40,018 people were imprisoned, tortured or slain during the 1973-90 dictatorship. Chile's government estimates that of those, 3,095 were killed, including about 1,200 who were forcibly "disappeared."
Contreras supervised the apprehension of thousands of suspected leftists after the coup as Santiago's national soccer stadium was transformed into a detention center where hundreds were held and tortured.
About 150 bodies, many of them weighed down by sections of railroad track, were thrown from helicopters into the ocean and lakes, the military has acknowledged.