Mr Smith played a central role in the ceasefire of loyalist paramilitary groups in 1994.
The announcement came six weeks after the IRA announced its own ceasefire.
Mr Smith spent ten years in prison for his role in the shooting of a Catholic in 1972. After his released from prison, Mr Smith became a member of the PUP.
In 1994, Mr Smith chaired a press conference in which a statement on behalf of the Combined Loyalist Military Command was read out by Gusty Spence, a founding member of the UVF.
He later served as the chairman of the PUP and was part of the party's negotiating team around the Good Friday Agreement.
The Deputy First Minister, Sinn FÃ©in's Martin McGuinness, tweeted: "Sorry to hear that William (Plum) Smith has died.
"I valued his commitment and contribution to peace. My sympathy to his wife and family."
The former PUP leader Brian Ervine told BBC Radio Ulster's Good Morning Ulster programme: "It's very, very sad that Plum has passed on.
"Plum was in the forefront of negotiating and bringing loyalist paramilitaries into the peace process and politicising the UVF and Red Hand Commando.
"He was a very intelligent fellow, he educated himself in Long Kesh.
"He also took Irish lessons there as well, he called the Irish language his own language.
"I'm just very, very sorry, I found him a very decent human being, and I found him a very forward thinking human being and he will be a loss, certainly to the Progressive Unionist Party and the loyalist community.
"He was a clear thinker, he was left of centre politically, he had a heart for ordinary people, for working class people, he tried to provide a voice, a voice which had been neglected.
"He was also happy enough to stretch over the fence and do business with traditional enemies."

Mark Jeansonne said his client, Chris Few, had his hands up and was not threatening police when gunfire began.
Two city marshals in Louisiana have been charged with second-degree murder.
The lawyer had not seen the video, but it was described to a judge during a court proceeding on Monday.
The two men opened fire on a car in which the family was riding during a traffic stop in Marksville, Louisiana.
As lawyers gathered at the court, mourners met for Jeremy Mardis' funeral in neighbouring Hattiesburg, Mississippi, from where he had recently moved.
Mr Few meanwhile remained in hospital, unable to attend his son's final service.
He has not been told that his son is dead, the lawyer said.
Col Michael Edmonson of Louisiana state police said on Monday he was still "figuring out" why the father and son's car was being pursued by police.
Hopefully they did not see the boy was in the back seat before they fired, he told CNN.
Early reports said that the two officers were serving a warrant on Mr Few.
However, Mr Edmonson said there was no evidence a warrant was issued, and that no gun was found at the crime scene.
The two officers, Derrick Stafford and Norris Greenhouse, were arrested on Friday after body-camera footage taken from them was assessed.
Referring to the body-camera footage of the incident, Col Edmondson added: "I can tell you, it is the most disturbing thing I've seen, and I'll leave it like that."
They each face charges of second-degree murder and second-degree attempted murder. They are currently being held in a Louisiana jail.
Former loyalist paramilitary and Progressive Unionist Party (PUP) chairman William 'Plum' Smith has died.
[NEXT_CONCEPT]
Body camera footage shows that the father of a six-year-old autistic boy was attempting to surrender before police opened fire, killing his son, a lawyer has said.