Goody, 27, ill with cervical cancer, died at her home in Upshire, a village in southeast England, at 3.14 a.m. GMT with her mother Jackiey Budden, husband Jack Tweed and family friend Kevin Adams by her side, her publicist Max Clifford said.
Goody's mother said: "My beautiful daughter is at peace."
The actress slipped into a coma-like state Saturday and was declared too ill to spend any time with her sons.
Clifford said it was ironic that Goody had died on Mother's Day.
The television star, who lived out her most intimate moments in front of the camera, struck media deals worth nearly a million pounds to secure the future of her two young sons - Bobby, 5, and Freddie, 4.
"I think she's going to be remembered as a young girl who has, and who will, save an awful lot of lives, " Clifford said in a reference to the fact that cervical cancer testing has rocketed in Britain after her public battle with the disease.
"She was a very, very brave girl. And she faced her death in the way she faced her whole life - full on, with a lot of courage."
Goody, a working class woman from south London who worked as a dental nurse, shot to fame in 2002 when she appeared on the reality TV show "Big Brother" and made an immediate impression with her feistiness, attracting critics and fans in equal measure.
But she became controversial in the celebrity version of the same show in 2007, when Channel 4 network expelled her after thousands of viewers complained she had racially bullied Bollywood star Shilpa Shetty, who was on the same show.
Goody, who called the Bollywood star "Shilpa Poppadum" and told her to "go back to the slums" during run-ins, angered fans in India, who burnt Goody's effigies during a visit by then Chancellor of the Exchequer Gordon Brown.
But before the incident could turn into a diplomatic row, Goody apologised, made up with Shetty, undertook a tour of India and - in a remarkable turnaround - bounced back in the public eye.
It was in India, while Goody was making an appearance on the Indian version of 'Big Brother', that British doctors told her she was suffering from cervical cancer. She flew back home for treatment but the cancer spread to her liver, bowel and groin.
Goody then allowed a television channel to film her being treated in a reality show called 'Jade'. In tandem, British tabloids reported her every move and statement on a daily basis.
She married her long-time boyfriend Jack Tweed last month and was christened with her sons this month.
Jade told exclusively last month that she felt "honoured by India's love" and relayed "a big thank you" to the thousands of Indians who sent her letters, emails and cards.
As British politicians led by Prime Minister Gordon Brown Sunday joined celebrities in paying rich tributes to Jade - he called her "courageous" and praised her work in raising cancer awarness - Indian actors who had worked with her on last TV show described her as a "lively" and "always smiling" person.
"I am feeling extremely sad... We were hoping that some miracle would happen and she would live for many more years, " Ketaki Dave, one of Jade's "Bigg Boss 2" inmate, told from the US.
Added another inmate and music reality show winner, Debojit Saha: "I can't believe that she is no more with us. It all happened so fast and suddenly that I am not able to come to terms with it."
Actor Raja Chaudhry, divorced husband of TV actress Shweta Tiwari, called her "a gem of a person".
The Sultan of Brunei's son Prince Azim, whose unexpected friendship with Jade in 2007 attracted much media attention, said: "Jade was a warm and lovely lady. My condolences to (husband) Jack (Tweed) and her family."
All through Sunday, ordinary well-wishers left flowers outside Goody's home in the village of Upshire in Essex.
The actress' funeral will be an eventful service and a "celebration of life" as Jade had desired, publicist Clifford said.
"Jade wanted a celebration of her life. It will be very much a Jade Goody Production with Jade doing her own thing her own way. It will be a celebration, but of course there will be a lot of tears, " he said. No date has been set but it is likely in the next 10 days.