Reddy was undergoing treatment for the past couple of weeks, and died at a private hospital at around 11 am. He is survived by two daughters and a son.
The actor, who had his first hit Ankusam in 1990, went on to act in as many as 250 films in Telugu, Tamil, Kannada, Hindi, Malayalam and Bhojpuri.
Ankusam was remade in Hindi as Pratibandh, and his character Spot Anna became very famous.
The final rites would be conducted at the Punjagutta crematorium this evening.
Hailing from Chittoor district of Andhra Pradesh, Reddy started his career as a journalist before entering the film industry.
Comedian Brahmanandam termed the sudden demise of Reddy as a big loss for the film industry. "He (Rami Reddy) was a great actor," Brahmanandam said.
Rami Reddy's roles in Telugu films include Osey Ramulamma, Gayam, Ammoru, Jagadeka Veerudu Athiloka Sundari and Kshana Kshanam.