Karl Lagerfeld was best known for his association with France's Chanel.

German haute-couture designer Karl Lagerfeld, artistic director at Chanel and an icon of the global fashion industry for over half a century, has died, a source at the French fashion house said on Tuesday. He was 85.

Lagerfeld, instantly recognisable in his dark suits, pony-tailed white hair and sun glasses, was best known for his association with Chanel but delivered collections for LVMH's Fendi and his own eponymous label.

Rumours of Lagerfeld's ill-health had swirled after he missed Chanel's January show in Paris.

"We have lost a creative genius who helped to make Paris the fashion capital of the world and Fendi one of the most innovative Italian houses," LVMH chairman and chief executive Bernard Arnault said in a statement.

"We owe him a great deal: his taste and talent were the most exceptional I have ever known."

A true craftsman who combined artistic instinct, business acumen and commensurate ego, Lagerfeld was known for his strikingly visual fashion show displays and extravagant outfits.

Born in Hamburg in 1933, Lagerfeld made his debut with designer Pierre Balmain as an apprentice before moving on to Patou and Chloe and then Italian brand Fendi. He gained a rock-star status after he joined Chanel in 1983.

He earned the nicknames "Kaiser Karl" and "Fashion Meister".

"We are deeply saddened to learn the news of Karl Lagerfeld's passing today. His unrivalled contribution to the fashion industry changed the way women dress and perceive fashion," Caroline Rush, chief executive of the British Fashion Council said in a statement.

French celebrity online magazine Purepeople said Lagerfeld died on Tuesday morning after being taken to hospital in Neuilly-sur-Seine just outside Paris the night before.

A spokesman for Chanel was not immediately available for comment.