The wrestling legend, whose real name was Christopher Alan Pallies, took on Hulk Hogan in the iconic steel cage match at WrestleMania 2 in 1986.
World Wrestling Entertainment said in a statement that it was "saddened" by the news of his passing.
Pallies' death was also confirmed by long-time friend and wrestling promoter, David Herro. "Today we lost a legend and a man I consider family," he wrote on Facebook. "Rest in peace Chris. We love you. Thank you for believing in me."
Pallies, who was born in Atlantic City, New Jersey, started his wrestling career for the World Wrestling Federation in 1981 under the name Chris Canyon, before changing his name to King Kong Buddy.
At 6-foot-4-inches tall and weighing 458 pounds, he was aptly nicknamed the "walking condominium," according to the WWE.
He dominated the first WrestleMania event at Madison Square Garden in 1985, defeating S.D Jones in just nine seconds, setting a record which remained until 2008.
He also challenged Hulk Hogan for the WWE Championship at WrestleMania 2, losing out to his opponent. The event would nevertheless go down as one of wrestling's most iconic moments.
Pallies retired temporarily from wrestling in 1988, before returning to the WWF in 1994 for The Million Dollar Corporation, and facing the Undertaker at WrestleMania XI in 1995.
He eventually retired from the WWF in 1995, starting a second career which included stand-up comedy and appearances in a number of films.
Wrestling stars have expressed their shock over the news. Hulk Hogan wrote on Twitter: "Overwhelmed by King Kong Bundy's passing, only great memories. RIP big man, until we meet again."
Semi-retired WWF wrestler Brutus 'The Barber' Beefcake also said: "Can't believe my friend Chris Pallies aka King Kong Bundy has passed away. Very sad news, he was a kind soul."
Pallies was due to appear at WrestleCon in April in New York.
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