Inouye's spokesman Peter Boylan said earlier Monday that Inouye had been hospitalized since early December "fighting respiratory complications."
His last word was "Aloha," according to a statement released by his office.
Inouye was the longest current serving senator at the time of his death and the second longest in Senate history. He was elected to office in 1962.
Inouye was a World War II hero and Medal of Honor recipient who lost an arm to a German hand grenade during a battle in Italy. He became the first Japanese-American to serve in Congress, when he was elected to the House in 1959, the year Hawaii became a state. He won election to the Senate three years later and served there longer than anyone in American history except Robert Byrd of West Virginia, who died in 2010 after 51 years in the Senate.
After Byrd's death, Inouye became president pro tem of the Senate, a largely ceremonial post that also placed him in the line of succession to the presidency, after the vice president and the speaker of the House.
Although tremendously popular in his home state, Inouye actively avoided the national spotlight until he was thrust into it. He was the keynote speaker at the 1968 Democratic National Convention, and later reluctantly joined the Senate's select committee on the Watergate scandal. The panel's investigation led to the resignation of President Richard Nixon.
Inouye also served as chairman of the committee that investigated the Iran-Contra arms and money affair, which rocked Ronald Reagan's presidency.
A quiet but powerful lawmaker, Inouye ran for Senate majority leader several times without success. He gained power as a member of the Senate Appropriations Committee and chairman of the defense appropriations subcommittee before Republicans took control of the Senate in 1994.
When the Democrats regained control in the 2006 elections, Inouye became chairman of the Senate Commerce Committee. He left that post two years later to become chairman of the powerful Senate Appropriations Committee.
Inouye also chaired the Senate Indian Affairs Committee for many years. He was made an honorary member of the Navajo nation and given the name "The Leader Who Has Returned With a Plan."
In 2000, Inouye was one of 22 Asian-American World War II veterans who belatedly received the nation's top honor for bravery on the battlefield, the Medal of Honor. The junior senator from Hawaii at the time, Daniel Akaka, had worked for years to get officials to review records to determine if some soldiers had been denied the honor because of racial bias.
More from Inouye's staff:
United States Senator Daniel K. Inouye, World War II veteran, Medal of Honor recipient and Hawaii's senior Senator, passed away from respiratory complications at 5:01 p.m. Eastern Standard Time today at the Walter Reed National Military Medical Center.
His wife Irene and his son Ken were at his side. Last rites were performed by Senate Chaplain Dr. Barry Black.
He is survived by his wife, Irene Hirano Inouye, his son Daniel Ken Inouye Jr., Ken's wife Jessica, and granddaughter Maggie and step-daughter Jennifer Hirano. He was preceded in death by his first wife, Maggie Awamura.
Senator Inouye's family would like to thank the doctors, nurses and staff at Walter Reed National Military Medical Center for the extraordinary care he received.
The story of Dan Inouye is the story of modern Hawaii. During his eight decades of public service, Dan Inouye helped build and shape Hawaii.
Senator Inouye began his career in public service at the age of 17 when he enlisted in the U.S. Army shortly after Imperial Japan attacked Pearl Harbor on December 7, 1941. He served with 'E' company of the 442 Regimental Combat Team, a group consisting entirely of Americans of Japanese ancestry. Senator Inouye lost his arm charging a series of machine gun nests on a hill in San Terenzo, Italy on April 21, 1945. His actions during that battle earned him the Medal of Honor.
Following the war he returned to Hawaii and married Margaret "Maggie" Awamura, and graduated from the University of Hawaii and the George Washington University School of Law.
After receiving his law degree, Dan Inouye, returned to Hawaii and worked as a Deputy Prosecuting Attorney for the City and County of Honolulu. He recognized the social and racial inequities of post-war Hawaii, and in 1954 was part of a Democratic revolution that took control of the Territorial Legislature.
Following statehood in 1959, Dan Inouye was privileged to serve as Hawaii's first Congressman. He ran for the Senate in 1962 where he served for nearly nine consecutive terms.
Dan Inouye spent his career building an enduring federal presence in Hawaii to ensure that the state would receive its fair share of federal resources. He worked to expand the military's presence on all major islands, stabilizing Pearl Harbor, building up the Pacific Missile Range and constructing a headquarters for the United States Pacific Command.
He has worked to build critical roads, expanded bus services statewide and secured the federal funds for the Honolulu Rail Transit project. He championed the indigenous rights of Native Hawaiians and the return of Kahoolawe.
He fought for the rights and benefits for veterans. Senator Inouye has left an indelible mark at the University of Hawaii, including support for major facilities and research assets. He has long supported local agriculture and alternative energy initiatives.
Dan Inouye was always among the first to speak out against injustice whether interned Japanese Americans, Filipino World War II veterans, Native Americans and Native Hawaiians.
A prominent player on the national stage, Senator Inouye served as Chairman of the Senate Committee on Appropriations, the Senate Commerce Committee and was the first Chairman of the Senate Select Committee on Intelligence.
After developing a reputation as a bipartisan workhorse, who always would put country above party, he was asked by the Senate leadership to chair the special committee investigating the Iran Contra Affair. This was after a successful tenure as a member of the Watergate Committee.
When asked in recent days how he wanted to be remembered, Dan said, very simply, "I represented the people of Hawaii and this nation honestly and to the best of my ability. I think I did OK."
His last words were, "Aloha."
This story is developing. Check back for more updates...