Blatty passed away Thursday evening at a hospital in Bethesda, Maryland, his widow, Julie Alicia Blatty, confirmed to CNN.
"It was multiple myeloma, a form of blood cancer. He was only diagnosed last month. We were married for 33 years," Julie said.
The writer passed away five days after his 89th birthday.
Blatty began his career in public relations in the 1950s before becoming an author.
In 1959, he ghost-wrote Abigail van Buren's bestselling book "Dear Teenager" and went on to publish several novels, including "Which Way to Mecca, Jack?", "John Goldfarb", "Please Come Home", "I, Billy Shakespeare", and "Twinkle, Twinkle, "Killer" Kane."
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Following his years working in the movie industry, Blatty took some time out to write "The Exorcist", which was later adapted into a classic film starring Linda Blair and Ellen Burstyn.
Blatty won an Academy Award for his screenplay for the 1973 movie, which he also produced, and a Golden Globe for Best Picture.
He also adapted, directed and produced a film version of his book "Twinkle, Twinkle, Killer Kane", which was re-titled "The Ninth Configuration". The film was nominated for three Golden Globes and won for Best Writing.
"The Exorcist" director, William Friedkin, tweeted Friday morning, "William Peter Blatty, dear friend and brother who created The Exorcist passed away yesterday."
Fellow author Stephen King tweeted, "RIP William Peter Blatty, who wrote the great horror novel of our time. So long, Old Bill.