Mr Peachey had announced his retirement from politics last month because he did not think he would have been healthy enough to complete another three-year parliamentary term.
He had suffered a number of health scares since he was elected to the historically strong National seat in 2005, abut had refused to talk directly on his medical status.
Mr Peachey was principal of Rangitoto College in Mairangi Bay when selected for the safe Tamaki seat, but was diagnosed with cancer shortly after entering Parliament.
He recovered following surgery but again had to take a break of several weeks last year after a lung collapsed.
He had become thinner and lost his hair in recent months, but continued to work as the Tamaki MP and chairman of Parliament's Education and Science Select Committee.
His last Just Peachey update on his website was dated October 10, where he explained his decision to retire.
"I have done this because I cannot get sufficient reassurance from the medical people, who look after me, that I can commit to serving a full three year term. In such circumstances I do not want to put the country at the risk of the cost of a by-election or cause any disruption to what I hope will still be the government."
John Key said Mr Peachey had hoped he was in remission.
"He's been battling against that and was never going to give up. He fought very hard but in the end the cancer's got him and that is very very sad."
The Prime Minister said Mr Peachey had wanted to stay on in Parliament: "he always felt he had a lot more to do."
He said in caucus Mr Peachey was "determined, quite focussed, opinionated and not afraid to say what he thought or to challenge the system.
"He passionately believed in what he was talking about."
National Party president Peter Goodfellow said Mr Peachey was "well respected" amongst his colleagues and in his electorate.
"He was really dedicated - he took some very firm views around education."
While Mr Peachey came in to politics straight from Rangitito College, he had made "a real impact" in his two terms.
"I think it was his was his career as a principal for many years that served his political career best."
Mr Goodfellow said Mr Peachey's health had been improving and his passing came as a real shock.
"He was looking forward to actually continuing his work in education in the Pacific Islands after he had finished with Parliament."
Mr Peachey spent 32 years in education, including as principal of Colenso High School, Napier (1990-93) and then the largest secondary school in New Zealand, Rangitoto College (1993-2005).
He was also president of the secondary Principals Association of New Zealand (1998-2000).
He wrote a book, published in 2005, called "What's up with our schools? a New Zealand principal speaks out".
He was married to his wife of 34 years, Jeanette, and had four adult children, two sons and two daughters.
Simon O'Connor was picked as his successor to contest the Tamaki seat for National.
