Igor Sergun, who headed Russia's Main Intelligence Directorate (GRU) since 2011, landed on the US and EU sanctions lists over Russia's annexation of Crimea from Ukraine in March 2014.
President Vladimir Putin said in a statement yesterday that Sergun was "a true officer, an experienced and competent commander, a person of great courage and a true patriot."
Sergun died on Sunday, the defence ministry said without disclosing the cause of his death. His successor has yet to be announced.
The West has accused Russia of supporting an armed insurgency in eastern Ukraine that has left more than 9,000 people dead since April 2014.
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Moscow denies that regular Russian troops are stationed in eastern Ukraine but has admitted that some Russian volunteers could have accomplished military tasks in the region.
The GRU - Russia's most secretive government agency - traces its history back to 1918 in the early months of the Bolshevik revolution, and unlike other Russian secret services did not change its name after the collapse of the Soviet Union.