The 73-year-old, whose hits included Something’s Got a Hold on Me and rhythm and blues standard At Last, had been diagnosed with the condition in 2010.
According to her long time friend and manager, Lupe De Leon, she died in hospital in Riverside, California.
Last month, Etta James – who has battled dementia and kidney disease during the past few years – was admitted to hospital after experiencing breathing difficulties but was discharged on January 6.
Lupe said at the time: “She is at home with her husband and her family by her side. Her condition remains stable. We think it’s best for her to be at home.”
Etta James first had a chart hit in her teens with The Wallflower (Roll With Me, Henry) in 1955.
She then joined Chess records in 1960 and had a string of R&B and pop hits including All I Could Do Was Cry, My Dearest Darling, Trust in Me and Don’t Cry, Baby.
The singer always felt she had a sad quality to most of her songs, telling CNN in 2002: “Most of the songs I sing, they have that blue feeling to it. They have that sorry feeling. And I don’t know what I’m sorry about. I don’t!”
Etta James’s own life was not without tragedy and she battled drug addiction through much of her career.
After a low period she launched a comeback in the 1970s and later performed at the opening ceremony of the 1984 Olympics in Los Angeles.
Etta James, pictured with Beyonce, was inducted into the Rock ‘n’ Roll Hall of Fame in 1993 and continued to perform into the 90s.
She said at the time: “I want to thank God for allowing me to come such a long way. I never thought about a hall of fame – I never thought about anything like that.”
Etta James’s later work is highly regarded and she won Grammys in 2003 for her album ‘Lets Roll’ and in 2004 for Blues to the Bone
The 2008 film Cadillac Records told the story of Chess records and featured Beyonce Knowles in the role of Etta.
A conservatorship hearing over the singer’s $1 million estate was conducted earlier this week with her singer’s son, Donto James, asking to be conservator rather than her husband, Artis Mills.