The New Zealand indie rock band formed in 1980 and was one of the earliest proponents of the Dunedin Sound.
Neil Finn, of Crowded House, posted on Facebook that he was "very sad" to hear of Phillipps' death.
"He was a good friend, wonderful musician and one of NZ’s greatest songwriters. A true original, fascinated by and devoted to the magic and mystery of music."
Fellow musician Don McGlashan described Phillipps as "a beacon to all of us, a wonderful songwriter, and a dear, kind man".
"He was one of the first musicians who showed us that you could wear your heart on your sleeve and be an artist in this strange country."
Phillipps’ songwriting career spanned four decades.
The Chills became popular around the world with hits such as Pink Frost, Doledrums, I Love My Leather Jacket, Heavenly Pop Hit and Male Monster from the Id.
Earlier this year, he started selling much of his beloved pop culture collection on Trade Me, which included collectable books, comics, posters, toys, CDs, DVDs and about 3000 rare records.
The 61-year-old had long battles with drug addiction and alcoholism and contracted hepatitis C in the 1990s.
He was recently admitted to Dunedin Hospital with liver problems.
In 2019, a documentary titled The Chills: The Triumph & Tragedy of Martin Phillipps, explored the history of the band and Phillipps’ contemporary struggle with hepatitis.
Close friend Scott Muir told the Otago Daily Times it was "with broken hearts" that family and friends advised of Phillipps’ death.
He said it was "unexpected".
"The family ask for privacy at this time. Funeral arrangements will be advised in due course."
An obituary will follow.
