Doctors had earlier suspended all treatment for Gen Contreras, 86.
He had been sentenced to 500 years in jail for human rights abuses.
Victims' families say Dina was behind more than half the cases of murder, disappearance and torture under the Pinochet government.
Gen Contreras was one of the main architects of Plan Condor, a co-ordinated campaign of political repression and assassination by military governments in the southern cone of South America which is said to have killed tens of thousands of people across the region.
Gen Contreras had been in the military hospital in Santiago since the end of last month.
A presidential decree in 2009 announced that on his death, he would not receive any military honours.
Questions have been asked by left-wing parties as to why he was not deprived of his rank of general when first sentenced.
Manuel Contreras - who headed Chile's intelligence service, Dina, during the government of Augusto Pinochet in the 1970s and 80s - has died in a military hospital in the capital, Santiago.