"Liz died peacefully last night at home with her loving family around her. She has been the love, light and inspiration in our lives and we are bereft at her passing."
Dawn had recently been confined to a wheelchair and has been housebound after being admitted to hospital.
Her years of smoking meant she struggled to breathe or walk and her former Corrie cast had been seen in tears because of her ill-health.
In 2012 she said: "My breathing was so bad I thought I was dying. I'd smoked for many years and I'd always had a bit of a cough and a splutter but I was getting worse and worse and struggling to breathe.
"I wasn't happy in Corrie for the last two years. I was frightened of letting people down when I was filming. I would cry sometimes because I was so stressed. It was a big strain being on a programme like that."
Her bereft colleagues and co-stars at Coronation Street have given a joint tribute to the star.
"It is with the greatest sadness that we have learned our beloved Liz Dawn has passed away last night. Her family at Coronation Street are heartbroken," they said.
"We extend our heartfelt condolences and sympathy at this very sad time to Liz's devoted husband Don, her loving children Graham, Dawn, Ann and Julie, their families and her six grandchildren and three great grandchildren.
"We have been blessed to have Liz in our lives, as she was such a kind, considerate and caring friend and colleague.
"As Coronation Street's Vera Duckworth for 34 years, Liz brought so much joy and happiness to so many. She was a wonderful actress who will forever be a true Coronation Street legend."
After being diagnosed with emphysema, Dawn was written out of the soap in 2008 when Vera died in her sleep.
Two years later, she made a moving comeback as the much-loved Corrie resident.
Just before he died, Jack saw a vision of the wife who had spent years nagging him and they shared a last dance together.
Tarmey died in Spain in 2012. At the time, she said: "You couldn't wish to meet a more lovely man and a true gentleman."
On behalf of ITV and the show, Coronation Street's executive producer Kieran Roberts said: "Liz Dawn was a true Coronation Street legend, a brilliant actor and a wonderful person.
"Everyone lucky enough to have worked with Liz during her 34 years playing Corrie icon Vera Duckworth will remember her with huge affection."
A family source said two weeks ago Dawn's usually upbeat demeanor had been affected by her ailing health.
"She's been in and out of hospital quite a few times in the last few years and normally the family are quite upbeat, but this time they seem more concerned," they told the Sun.
"She's not in a good way and her loved ones are obviously very worried."
In June she had surgery linked to a heart condition.
At the time she said: "I've got no energy but once the operation is done I will be looking forward to being as back to my normal self and getting my energy back."
In 2013 she had a pacemaker fitted after a heart attack while on holiday in Spain. She admitted at the time: "My health is very bad these days."