Storm Thorgerson, who has died aged 69 after suffering from cancer, was "the best album designer in the world" according to the writer Douglas Adams, and it was an assessment shared by generations of music fans. A lifelong working relationship with Pink Floyd began when Thorgerson designed the sleeve for the group's album A Saucerful of Secrets (1968). Subsequently, the unforgettable creations from Thorgerson's Hipgnosis company became the first choice for such influential shapers of the rock era as Led Zeppelin, Peter Gabriel, the Nice, Paul McCartney and Black Sabbath, as well as for more recent stars including the Cranberries and Anthrax.

When he started studying at the Royal College of Art in London, Thorgerson shared a flat in South Kensington with his friend Aubrey Powell, who found a job as a scenic designer at the BBC. It became a hub for a variety of artistic and musical characters, including Pink Floyd. The invitation from the Floyd to create the artwork for A Saucerful of Secrets, their second LP, came after Thorgerson and Powell started out in design by creating book covers for a publishing friend of Thorgerson's, in which they experimented with infra-red photography.

The pair devised the name Hipgnosis, the partnership that they had started in 1967, by combining "hip" with the Greek word "gnosis", meaning "learning". For Saucerful, they concocted a cosmic, swirling design featuring multiple visual elements, perfectly in synch with both the album and the era. It caught the attention of other musicians, who were soon beating a path to their door.

Their client list expanded steadily to encompass Genesis and the solo Peter Gabriel, Yes, the Alan Parsons Project, 10cc, Bad Company and Paul McCartney & Wings. The Madcap Laughs (1970) – the solo album that Syd Barrett released after leaving Pink Floyd – T Rex's Electric Warrior (1971) and Wishbone Ash's Argus (1972) all benefited from Hipgnosis's visual mystique.

The Argus sleeve prompted Jimmy Page to invite Hipgnosis to create artwork for Led Zeppelin's Houses of the Holy (1973), and they responded with an image of strange naked children crawling over rocks. It was inspired by the Arthur C Clarke novel Childhood's End, and used a collage of photographs taken at the Giant's Causeway in Northern Ireland.

Hipgnosis's approach to design started from photography and applied techniques such as airbrushing and multiple exposures to create surreal dislocations and disturbing juxtapositions. Today similar effects could be created using software such as Adobe Photoshop, but Thorgerson's retort to this notion was: "I prefer the computer in my head to the one on my desk."

He cited as influences artists and photographers including Man Ray, Magritte, Picasso, Kandinsky, Juan Gris and Ansel Adams, and described his working method thus: "I listen to the music, read the lyrics, speak to the musicians as much as possible. I see myself as a kind of translator, translating an audio event – the music – into a visual event – the cover. I like to explore ambiguity and contradiction, to be upsetting but gently so. I use real elements in unreal ways."

Working with Pink Floyd always seemed to give Thorgerson an extra shot of inspiration. The prism design for the group's blockbuster Dark Side of the Moon (1973) genuinely merits that much over-used term "iconic", and the image of a blazing businessman on a studio back lot on Wish You Were Here (1975) provoked endless late-night discussion among Floyd cognoscenti.

The cover shot for Animals (1977), depicting a pig flying over Battersea power station, was both startling and comic. During the photo shoot, the lighter-than-air pig slipped its moorings and presented a hazard to aircraft approaching Heathrow airport. For the cover of A Momentary Lapse of Reason (1987), Thorgerson painstakingly arranged 700 hospital beds stretching away into infinity on a beach, later admitting that it was "madness to do it".

Thorgerson was born in Potters Bar, north of London, and attended what he saw as "the original free school", AS Neill's Summerhill in Suffolk, before moving on to Cambridge high school for boys. He commented that his adolescence was blighted only by his parents' divorce.

In Cambridge, Thorgerson went to school with Barrett and another future Pink Floyd member, Roger Waters. He had an additional connection with Waters in that their respective mothers were good friends, and he also knew David Gilmour of Pink Floyd and Powell from his Cambridge days. Thorgerson said: "I look back fondly on those teenage years – great friends, illuminating experiences, and of course the music." He graduated in English and philosophy from Leicester University (1966), and at the RCA took an MA in film and television (1969).

Eventually the compact disc began to take the place of the LP, and in 1983 Thorgerson branched out into video by forming Green Back Films with Powell and Peter Christopherson. It made clips for Paul Young, Yes and Robert Plant before falling apart in 1985.

Thorgerson continued directing videos on his own, and extended his reach by working in commercials, though he found the latter environment "emotionally, intellectually bankrupt". Nevertheless, his droll commercial One Great Thing, for Tennent's lager, won a Golden Rose award in Scotland. He also made TV documentaries, including The Art of Tripping (1993), with a soundtrack by Gilmour, which investigated the effect of drugs on creativity, and a science documentary called Rubber Universe (1994).

While Thorgerson continued to work on Pink Floyd projects, he also designed album artwork for many newer artists, among them Audioslave, Biffy Clyro and 21st-century prog-rockers Muse. He and Powell presented highlights of their work between hard covers in For The Love of Vinyl: The Album Art of Hipgnosis (2008), while Thorgerson wrote several books on album-cover design including The Art of Hipgnosis: Walk Away René, Mind Over Matter and Eye of the Storm.

Taken by Storm: The Album Art of Storm Thorgerson was a limited edition book and box set priced at £500 a copy. In 2009, Thorgerson and Powell made some of their original work available to art collectors for the first time, selling a selection of favourite pieces through Heritage Auctions Galleries.

Thorgerson is survived by his wife, Barbie Antonis; her children, Adam and Georgia; his son Bill, from his earlier relationship with Libby January; and his mother, Vanji.

• Storm Elvin Thorgerson, graphic artist, born 28 February 1944; died 18 April 2013

• Storm Thorgerson's website