The former construction magnate, from Tickhill, had suffered from numerous health issues in recent years and underwent a double heart bypass in 2014 where he also received a replacement aortic valve.
Rovers confirmed the news this morning and delivered a statement from the Watson family.
It read: “We are devastated at the loss of Dick, and thank Rovers fans for the support they have shown the family over the years.
“While we ask for privacy while we grieve, we will continue to throw ourselves into the club as that is what Dick would have wanted.”
Rovers chief executive Gavin Baldwin added: “This tragic news has come as a real shock, and I would like to extend the sympathies of everyone at the club to the family.
“The Watsons have been a big part of Rovers for a number of years, and the family can be very proud of Dick’s legacy.
"We will work with the family and the rest of the board to ensure we build on the tremendous foundations we now have, a large part thanks to Dick's passion for the club."
Mr Watson formed Keepmoat with Terry Bramall, who he had worked alongside at Bramall and Ogden. He became managing director of Keepmoat in 1985, chief executive in 1990 and subsequently chairman of the company.
He departed Keepmoat - signalling his retirement - in August 2007 along with Mr Bramall after a management led buy out of the company.
A few months later, both Mr Watson and Mr Bramall became equal shareholders in Doncaster Rovers alongside John Ryan.
The addition of Mr Watson and Mr Bramall provided a significant financial boost to the club which undoubtedly helped in the rise to the Championship in 2008.
He was named president of Rovers in 2014 and saw his shareholding in the club increase in 2015 when Mr Ryan handed back his stake after walking away.
Mr Ryan made a statement on his Facebook page: "So sorry to hear of the passing of Dick Watson a great guy who always had Rovers at heart RIP."
Mr Watson is survived by wife Marion, 72, son Andrew, 48 and daughter Sarah, 46.