Balcells, who represented Nobel-winning authors Mario Vargas Llosa and Gabriel Garcia Marquez, died on Sunday in Barcelona, a spokesman for her agency told AFP without giving further details.
"The family wants privacy. They will issue a statement on Tuesday," she added.
Balcells, who never attended university, is credited with being one of the forces behind the so-called "Latin American Boom", an unprecedented burst of creativity, genre-bending works and success that came out of Latin America in the 1960's and 1970's.
She discovered Garcia Marquez after she read a draft of the Colombian author's short story "Big Mama's Funeral" which gave her the nickname as the "mama" of the Latin American Boom.
She went on to represent other big names such as Argentina's Jorge Luis Borges, Chile's Pablo Neruda and Isabel Allende, and Uruguay's Juan Carlos Onetti.
"I can't imagine my life without Garcia Marquez," she said during a television interview in 2012.
"All of a sudden I found myself surrounded by geniuses," she added, referring to the writers she represented, many of them who were living in Barcelona at the time.
Born in 1930 at Santa Fe de Segarra, a small village in Catalonia in northeastern Spain, Balcells began her career by working at the agency of Romanian author Vintila Horia before opening her own agency in 1960.
After finding success with Latin American writers, she turned to Spanish authors and represented Camilo Jose Cela, among others.
In 2014 her agency merged with one owned by US agent Andrew Wylie, creating Balcells & Wylie, one of the biggest international literary agencies.
Spanish Prime Minister Mariano Rajoy hailed Balcells as an "indispensable figure" in Spanish literature in a Twitter message after her death was announced.