Sanford passed away at 11:30 a.m. at his Durham home surrounded by his wife and children, said family friend Tom Drew.
Gov. Jim Hunt remembered his fellow Democrat on Saturday as one of North Carolina's most memorable and important leaders.
``Terry's spirit of boundless optimism and commitment to excellence for our children and our public schools have changed us forever,'' Hunt said. ``As a college student, I was inspired by his ideas for education and equal opportunity for our people. I plunged into the campaign to elect him governor (in 1960) and, to me, he was the best one ever.''
Terry Sanford was born in Laurinburg, North Carolina on August 20, 1917.
He attended Presbyterian Junior College in Laurinburg, then he graduated from the University of North Carolina where he also received a law degree.
Sanford worked two years as a special agent for the FBI and, after marrying Margaret Rose Knight, served with distinction as a paratrooper in World War Two. He fought in five campaigns including the invasion of France and the Battle of the Bulge.
Sanford announced in December 1997 that he suffered from inoperable cancer of the esophagus that had spread to his liver and lymph nodes.
His doctors said then that his survival likely would be measured in months, but Sanford voiced his typical optimism.
``I've faced death probably 80 or 100 times,'' said Sanford, a decorated Army veteran.
After learning he had cancer, Sanford concentrated on efforts to build a performing arts center near Research Triangle Park. His goal was a complex that would one day rival the Lincoln Center in New York or the Kennedy Center in Washington, D.C.
Sanford's political career began in 1953 with his election to the North Carolina State Senate. Hard work and development of a grassroots political organization swept the 44-year-old Democrat into the Governor's office on the coat-tails of John F. Kennedy. Sanford, governor from 1961 to 1965, was listed in a 1981 Harvard University study as one of the nation's 10 best governors this century. He was president of Duke University from 1969 to 1985, during which time he made unsuccessful presidential bids in 1972 and 1976.
He was elected to the Senate in 1986, but lost his bid for a second term six years later, shortly after undergoing heart surgery. His most controversial stand during his term was his opposition to the Gulf War.
Sanford referred to his own presidential candidacy in 1972 as ``more or less an audacious move.''
In his campaign, Sanford pressed for more government action to promote jobs in the private sector, a balanced federal budget and lower interest rates. He opposed a national gun control law, arguing it should be left to cities and states, and proposed large cuts in defense spending.
He argued that training and jobs should replace welfare, and opposed court-ordered busing to achieve integration, saying that schools in poor neighborhoods should be improved so people of all races would want their children to attend.
Education was the cornerstone of the Sanford Administration. His efforts resulted in development of community colleges, more teachers at higher salaries, improved curriculum, and expanded libraries. The Governor's School and North Carolina School of the Arts remain models for the nation.
While running for governor in 1960, Sanford became an early supporter of John F. Kennedy's presidential bid, breaking with the rest of the North Carolina convention delegation. He campaigned hard on the theme of education reform, arguing that a well-trained work force would be essential to luring high-technology jobs.
``We're going to make public education the dominant issue of the campaign and the dominant purpose of the next administration,'' he said.
On foreign affairs, Sanford said the United States should be above taking sides in every international scuffle simply because the Soviet Union gets involved.
``I simply was not able to get the credibility,'' Sanford said at the time. ``They thought nobody from North Carolina and nobody from the South could be president. ... I was shot out of the saddle, almost before I swung into it.''
In 1976, the problem was money, Sanford said. But the Democratic nomination went to another Southerner, former Georgia Gov. Jimmy Carter.
``I'm glad I was one of the first to say that it could be done from the South,'' Sanford said.
North Carolina also experienced booming industrial growth while Sanford was governor. After his term ended he joined a Raleigh law firm and continued his political involvement. In 1969, Sanford returned to education, this time as President of Duke University.
Sam Poole, a close aide to Sanford who formerly chaired the University of North Carolina Board of Governors, said Sanford brought the same energy and commitment to Duke, where he was president from 1969 to 1985, that he did to his gubernatorial term.
``His tenure brought Duke from being a good sort of Southern kind of school into a nationally and internationally prominent university, which is a status that it maintains to this day,'' said Poole.
National political office called in the 70's. Sanford made unsuccessful bids for the Democratic Presidential nomination in 1972 and 1976. He ran against James Broyhill and was elected to the U.S. Senate in 1986.
While in the Senate he served on the Banking, Housing and Urban Affairs Committee, the Budget Committee, the Foreign Relations Committee and the Select Committee on Ethics.
Heart problems surfaced as Sanford attended the Democratic National Convention in the summer of 1992. He headed the North Carolina delegation, but he appeared on the convention floor only to give North Carolina's votes to eventual nominee Bill Clinton.
Sanford was locked in a battle for his second Senate term with Lauch Faircloth, a long time friend who had switched to the Republican party.
Some political observers speculated Sanford's health problems cost him re-election.
Always looking for a challenge, Sanford teamed with former Governor Jim Holshouser creating the Sanford and Holshouser law firm.
He lectured at Duke University's Terry Sanford Institute of Public Policy and published his fourth book,Outlive Your Enemies: Grow Old Gracefully.
Shortly before his death, Sanford joined arts-backers pushing for a regional performing arts center.
Survivors include Sanford's wife of 52 years, Margaret; his son, Terry Sanford Jr.; his daughter, Betsy; two grandchildren and two sisters.
The affable governor and senator is remembered as a voice of moderation and common sense. He helped steer North Carolina into a leadership position among states. More than forty years of service to the people of his state are over. From staff and wire reports