Reed's death at the age of 71 was first reported by Rolling Stone magazine on Sunday and later confirmed by his literary agent, Andrew Wylie.

Wylie told the Guardian newspaper that the musician had died on Sunday morning in Southampton, New York, of an ailment related to a recent liver transplant.

Also a solo artist, Reed was best known for his work with The Velvet Underground - a band credited for strengthening the influence of the avant-garde on rock music.

The band did not achieve huge commercial success in its heyday, but won over a cult audience and an inspiration for musician in the decades that followed.

The Velvet Underground was famed for an experimental approach to atmosphere and tempo, as well as smooth and often monotone melodies - fronted by Reed himself, as well as the German model Nico.

Fusion of art and music

Born in Brooklyn, Reed was a protege of the pop art luminary Andy Warhol, at whose insistence Nico sang for the band. Warhol designed the iconic banana that featured on the cover of the band's seminal first album, "The Velvet Underground & Nico," in 1967.

"The first Velvet Underground album only sold 30,000 copies in the first five years. I think everyone who bought one of those 30,000 copies formed a band," is a quote attributed to the musician and producer Brian Eno.

Among Reed's best-known works was "Walk on the Wild Side," an ode to underground New York life, as well as "Heroin," "Sweet Jane" and "Perfect Day."

Online tributes poured in to social media sites for Reed, a self-confessed hard drinker and drug user who is understood to have undergone a liver transplant earlier in the year.

"I am a triumph of modern medicine," Reed had posted on his website in June, without directly acknowledging that he had undergone surgery. "I look forward to being on stage performing, and writing more songs to connect with your hearts and spirits and the universe well into the future."

rc/mkg (AP, AFP, Reuters)