Kerr, who wrote and illustrated a number of enduring children's books including The Tiger Who Came To Tea, died at home on Wednesday following a short illness, her publisher HarperCollins said.
A much-loved and timeless classic, The Tiger Who Came To Tea has sold more than five million copies since it was first published in 1968, and it has never been out of print.
Earlier this year, Channel 4 announced it would air a special animated adaptation of the book, which tells the story of a tea-guzzling tiger, who turns up unannounced and eats and drinks Sophie and her mother out of house and home.
Kerr's other works include When Hitler Stole Pink Rabbit and the Mog the Cat series of books.
Ann-Janine Murtagh, executive publisher HarperCollins Children's Books, said: "It has been the greatest honour and privilege to know and publish Judith Kerr for over a decade, though of course her history with HarperCollins goes back over 50 years.
"She came to visit our offices frequently - always bringing her books in person; often arriving on the number nine bus and leaving us all full of laughter and in awe of her astonishing zest for life and absolute commitment to delivering the very best books for children.
"Her incisive wit and dry humour made her both excellent company and a joy to publish. She embraced life as one great big adventure and lived every day to the full. She was absolutely thrilled when I gave her the news that she had been named Illustrator of the Year earlier this month. Her characters and books have delighted generations of children and provided some of the first and fondest reading memories of childhood.
"My thoughts at this time are with her children, Matthew and Tacy, and her grandchildren."
Charlie Redmayne, HarperCollins chief executive, said: "Judith Kerr was a wonderful and inspiring person who was much loved by everyone at HarperCollins.
"She was a brilliantly talented artist and storyteller who has left us an extraordinary body of work. Always understated and very, very funny, Judith loved life and loved people - and particularly she loved a party.
"Beautifully dressed and with a smile on her face she would light up the room and would always be one of the last to leave. Time spent in her company was one of life's great privileges and I am so grateful to have known her."