Schlitz was 73.
The cause of death was not immediately known.
A press release from the Grand Ole Opry described it as a sudden illness.
The two-time Grammy Award winner was inducted into the Songwriters Hall of Fame, the Nashville Songwriters Hall of Fame and the Country Music Hall of Fame.
"I will never be able to believe that I deserve this, unless I receive it as a representative of my family, my mentors, my collaborators, my promoters and my friends," Schlitz said in 2017 when he learned of the Country Music Hall of Fame honour.
"That's the only way I can deal with this."
Schlitz made his Grand Ole Opry debut in 2017 and was later inducted in 2022.
He is the only non-artist to receive the honour in the Opry's 100 years.
The historic venue's Saturday night show will be dedicated in his honour.
He was named ASCAP Country Songwriter of the Year for four consecutive years, from 1988 through 1991.
He also wrote music and lyrics for The Adventures of Tom Sawyer, the 1999 Broadway musical.
Schlitz's songs are widely considered some of the most unwavering in country music, and have been recorded by such hit makers as Kenny Rogers (The Gambler, The Greatest), Randy Travis (On the Other Hand, Forever and Ever, Amen), The Judds (I Know Where I'm Going), The Nitty Gritty Dirt Band (I Love Only You), Tanya Tucker (I Won't Take Less Than Your Love), Mary Chapin Carpenter (He Thinks He'll Keep Her) and many others.
He also wrote You Can't Make Old Friends for Rogers and Dolly Parton; their first duet since 1983's Islands in the Stream.
Schlitz, a North Carolina native, was born in 1952 and raised in Durham before packing his bags and heading to Nashville.
His first recorded song, The Gambler, is perhaps his most enduring hit and the tent-pole of his legacy.
The song, which was recorded by Rogers in 1978 and certified five times platinum by the Recording Industry Association of America (RIAA), opened doors for country music in the '70s, a track that was not only a huge genre hit but also a pop crossover one.
As Rogers said when he inducted Schlitz into the Songwriters Hall of Fame in 2012, "Don doesn't just write songs. He writes careers".
"We are heartbroken by the news of the passing of Don Schlitz. Don loved his family, his home state of North Carolina, and above all, songs and songwriters," Sarah Trahern, Country Music Association CEO, wrote in a statement on Friday.
"He carried that love into every room, every stage and every lyric he ever wrote," she said.
"Not long ago, we shared a dinner, and as we were leaving, Don picked up a guitar and began to play. That is how I will always remember him, smiling and with a guitar in his hand. His legacy lives on through his music and the many artists and writers he inspired. He will be deeply missed."
"Don Schlitz's place as a songwriting great would be secure had he never written The Gambler or had he only written The Gambler," Kyle Young, CEO of the Country Music Hall of Fame and Museum, said.
"Nashville was richer for his presence and is lesser for his absence."
Schlitz is survived by his wife Stacey, daughter Cory Dixon and her husband Matt Dixon, son Pete Schlitz and his wife Christian Webb Schlitz, grandchildren Roman, Gia, Isla and Lilah, brother Brad Schlitz and sister Kathy Hinkley.
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