Groening was convicted in 2015 of being an accessory to the murder of 300,000 people at the death camp, but he avoided serving his four-year sentence by requesting multiple appeals.
German prosecutor Kathrin Soefker said he died in hospital on Friday.
"The death of Oskar Groening just before he was scheduled to begin to serve his sentence in a German jail following his conviction three years ago for accessory to murder is quite unfortunate, at least on a symbolic level", Efraim Zuroff, director of the Israel office of the Simon Wiesenthal Centre and an expert in Nazi war criminals, said in a statement issued Monday.
Groening worked as an accountant at Auschwitz, sorting belongings and counting the money taken from those killed or used as slave labour, and shipping it back to his Nazi superiors in Berlin.
He was also on several occasions assigned to "ramp duty", processing deportees as they arrived by rail in cattle cars at the Nazi German death camp in occupied Poland.
Yet, of the camp's 6,500 SS personnel who survived the war, fewer than 50 were ever convicted.
He acknowledged "moral guilt" and said he was "very sorry" for his actions. This was one of the last Holocaust-related court trials.
Demjanjuk, who always denied serving at the Sobibor camp, died before his appeal could be heard.
German prosecutors deemed Groening to be fit enough to go to prison as long as there was appropriate medical care.
Groening's court battle was seen as one of the last major trials related to the Holocaust, during which some six million Jews were murdered by Adolf Hitler's regime.
Groening died in the hospital, Der Spiegel reported.