The 25-year-old Dundee fighter was stretchered from the ring following a fifth-round loss to Welshman Dale Evans in a St Andrews Sporting Club fight at a Glasgow hotel on Thursday.
He was taken by ambulance to the city's Queen Elizabeth University Hospital, but in the early hours of Saturday morning his management team said he had died with his family at his bedside.
‘Within the last hour Mike Towell passed away -- he will always be in our hearts #RIPIronMike,’ St Andrews Sporting Club said on Twitter.
Towell's partner, Chloe Ross, wrote on Facebook: ‘I'm absolutely heartbroken to say my annoying best friend passed away tonight at 11.02 very peacefully.’
Boxing trainer Shane McGuigan tweeted: ‘Heartbreaking news that Mike Towell has lost his life. May he rest in peace, thoughts go out to his loved ones. #RIP’
British promoter Eddie Hearn said: ‘Absolutely devastated by the passing of Mike Towell -- all of our thoughts with his friends and family at this time.’
Towell was knocked down twice in the fight before referee Victor Loughlin stopped the bout in the fifth round.
Towell had been unbeaten prior to the fight, a British welterweight title eliminator, with 11 wins and one draw on his professional record.