Mr Smith played a central role in the ceasefire of loyalist paramilitary groups in 1994.
The announcement came six weeks after the IRA announced its own ceasefire.
Mr Smith spent ten years in prison for his role in the shooting of a Catholic in 1972. After his released from prison, Mr Smith became a member of the PUP.
In 1994, Mr Smith chaired a press conference in which a statement on behalf of the Combined Loyalist Military Command was read out by Gusty Spence, a founding member of the UVF.
He later served as the chairman of the PUP and was part of the party's negotiating team around the Good Friday Agreement.
The Deputy First Minister, Sinn FÃ©in's Martin McGuinness, tweeted: "Sorry to hear that William (Plum) Smith has died.
"I valued his commitment and contribution to peace. My sympathy to his wife and family."
The former PUP leader Brian Ervine told BBC Radio Ulster's Good Morning Ulster programme: "It's very, very sad that Plum has passed on.
"Plum was in the forefront of negotiating and bringing loyalist paramilitaries into the peace process and politicising the UVF and Red Hand Commando.
"He was a very intelligent fellow, he educated himself in Long Kesh.
"He also took Irish lessons there as well, he called the Irish language his own language.
"I'm just very, very sorry, I found him a very decent human being, and I found him a very forward thinking human being and he will be a loss, certainly to the Progressive Unionist Party and the loyalist community.
"He was a clear thinker, he was left of centre politically, he had a heart for ordinary people, for working class people, he tried to provide a voice, a voice which had been neglected.
"He was also happy enough to stretch over the fence and do business with traditional enemies."
Former loyalist paramilitary and Progressive Unionist Party (PUP) chairman William 'Plum' Smith has died.