Sultan was the younger half-brother of Saudi Arabia's King Abdullah, who is has also been ailing and underwent back surgery last week.
The most likely candidate to replace Sultan as Abdullah's successor is Prince Nayef, the powerful interior minister in charge of internal security forces, who is said to be closer to Islamic conservatives than the king. The king gave Nayef — also his half-brother — the implicit nod in 2009 by naming him second deputy prime minister, traditionally the post of the second in line to the throne.
State TV announced that Sultan died abroad, without specifying where. Saudi official circles in Riyadh said he passed away at a hospital in New York. According to a leaked U.S. diplomatic cable from January 2010, Sultan had been receiving treatment for colon cancer since 2009.
Sultan, who was also deputy prime minister and defense minister, struggled with health issues for years, though officials never confirmed he had cancer. He underwent surgery in New York in 2009 and spent nearly a year abroad recuperating in the United States and at a palace in Agadir, Morocco, before returning to the kingdom.
The palace said the king, with "deep sorrow" mourns "the loss of his brother and Crown Prince, His Royal Highness Prince Sultan Abdul-Aziz Al Saud," the palace said. The statement, carried on the official Saudi Press Agency, added that Sultan's funeral will be held Tuesday at a Riyadh mosque.
For the first time the mechanism of picking the next crown prince is not entirely clear — though the end result is in any case likely to be Nayef.
It is possible the king will for the first time put the decision of his heir to the Allegiance Council, a body Abdullah created as one of his reforms, made up of his brothers, half-brothers and nephews with a mandate to determine the succession. That would open the choice up to a degree of debate within the top echelons of the royal family.
Traditionally the king names his successor. Abdullah formed the council in order to modernize the process and give a wider voice in the choice.