Tommy Burns has died at the age of 51 after losing his long-running battle with cancer.
The club's first-team coach originally contracted skin cancer in 2006 and although he received treatment, the disease returned in March.
Former Scotland international Burns, who spent 15 years as a player at Parkhead and also managed the club for three seasons, had been undergoing treatment in both Glasgow and France in recent weeks.
A statement from Celtic on their official website said: "It is with great sadness that Celtic Football Club confirmed this morning that Tommy Burns has passed away.
"Tommy, a true Celtic legend and wonderful man will be sadly missed by us all.
"Clearly, our thoughts are very much with Tommy's wife Rosemary and his family at this extremely difficult time."
Burns joined Celtic as a teenager in 1973 and went on to play 352 league games for the club, scoring 52 goals, and winning eight Scotland caps.
In 1989, he moved to Kilmarnock and was given his first job in management there three years later.
He left to take the Celtic reins in 1994 but was sacked three years later.
A short spell as boss of Reading followed before Burns became Scotland number two in 2002 under Berti Vogts and later Walter Smith.
He returned to Celtic as first-team coach shortly before Martin O'Neill's arrival, a position he retained when Gordon Strachan became manager.
He is survived by his wife of 28 years, Rosemary, and four children.
Strachan paid an emotional tribute, saying: "We'll all know how lucky we are that Tommy was part of our life.
"Every time he walked into a room you felt better when Tommy was about."
Burns, who had been treated in Britain and France, lost his battle with cancer.
After being diagnosed in March, Burns carried on working at Celtic, however he had recently been absent while he underwent treatment.
"We've missed him about the place," said Strachan. "It's not the same when he's not there.
"The most important thing I did when I came here [in 2005] was make Tommy assistant manager.
"Through his intelligence, common sense and humour, he made me understand what Glasgow was all about.
"He kept me sane at times. It was just a privilege to be in his company every day."
Celtic captain Stephen McManus said: "It's been a pleasure to have known him for eight years.
"You can't help but love him to bits. He's going to be sadly missed."
Chief executive Peter Lawwell added: "Tommy Burns will live forever in the club. He's part of the history.
"We've had many legends at this football club but truly he'll take his position in there.
"His energy, his drive, and his passion for this club was remarkable."
Chairman John Reid has confirmed the club will look at making a lasting tribute to Burns.
Reid told Sky News: "In his own playing life and as a manager he never compromised his own philosophy and his own style of football, which he really believed was the Celtic style.
"That in a sense is the best legacy that we can give him. Of course we will look at what might be done in memory of Tommy.
"But what he would really have wanted is the continuing and sustained commitment to Celtic Football Club, even through the difficult periods, to the support of that type of open, fast, flowing, attacking football.
"That is what he believed in and I know that is what the present management of the club believe in."
Reid added: "The great players, the great members of the family, are those who develop those around them.
"And Tommy spent the latter part of his life passing on his own philosophy and his own skills to others at Celtic Park and of course for his country too with Scotland.
"He'll be greatly missed.
"I got to know Tommy in recent years. I had the great fortune to know him a little more than perhaps the ordinary fan, and yet the ordinary fan felt he knew Tommy Burns because Tommy engaged with them, he connected with them, and by heavens the Celtic fans will feel a great sense of loss."
Peter Rafferty, of the Association of Celtic Supporters' Clubs, said: "I knew Tommy very well both as a friend and obviously through his connections with Celtic. I got to know him over many years.
"He was a true gentleman and a big family man. I would just like to pass my condolences on to Rosemary and his family on behalf of the Celtic supporters.
"Celtic was a big part of his life but the biggest part of his life was his family. He became a grandfather a few weeks ago and that is the biggest tragedy.
"Legend is a word that is used quite a lot these days but he was. He was a great player withCeltic first and foremost.
"He was a manager who played football the way Celtic supporters like to see it.
"All these things pale into insignificance this morning. He was a very nice person, a very religious person.
"If you needed anything, Tommy Burns would always be there for you."
Former Celtic team-mate Davie Provan also sent his best wishes to the family.
"I first came across Tommy in the Scotland Under-21 team - that must be 30 years ago," Provan told Sky Sports News.
"I will remember him as a very good footballer but more than that, a great human being. He was decent and honest.
"He was hugely popular at Celtic but I'm sure his death will cause great sadness among the Rangers supporters too.
"He embodied everything good about the club. He made a terrific Celtic manager but was desperately unlucky that Rangers under Walter Smith were so powerful.
"He was a great example to everybody at Celtic Park. He was a universally popular at the ground. He was born and brought up in the Calton district of Glasgow - a stone's throw from Celtic Park - and he got to live the dream.
"But football was a poor third in his life. His great devotion was Rosemary and his family, and his faith."
Another former Celtic team-mate, Frank McGarvey, said: "I'm shattered and I think everyone is shattered.
"My thoughts go out to his wife Rosemary and the family. It's a very sad day for everyone.
"He was one of Celtic's greatest servants and was one of the players who would try and go to every event that involved the supporters.
"He was only 51 and it's very hard to understand why this happens.
"He was one of the good guys, a winner, with a great sense of humour and he will be badly missed by everyone. A good friend has been taken away."
Tommy Gemmell, one of the Lisbon Lions who won the 1967 European Cup for Celtic, got to know Burns well despite playing for the club at different times.
Gemmell said: "He was a tremendous player and a great manager. And a great person.
"I don't think you will find anyone on this earth who will say a bad word about him.
"My feelings go out to Rosemary and his family. It is a very sad occasion for someone so young. It's a sad loss.
"I never had the privilege of playing with him but I watched him many times. He was a superb player with a lethal left foot.
"He will be sorely missed."
Former Celtic captain Paul Lambert was another Hoops favourite who knew Burns well.
"It's a shock," Lambert told BBC Radio Scotland.
"Even though you knew he wasn't too good, when you hear (of his death) it's still a massive, massive shock.
"It's a great loss, no doubt about it. He was just a terrific guy to have known.
"I worked under him for a few years with the national team and it's just a sad, sad loss."
Wycombe manager Lambert added: "His enthusiasm for the game was terrific. He was a very funny man.
"So soon after the Phil O'Donnell tragedy as well, and then Tommy. It's just horrific. It was a privilege knowing him."
Alan McInally, who played alongside Burns at Celtic and under him at Kilmarnock, said: "It's absolutely dreadful. I'm just absolutely devastated, devastated.
"At 51 years old, I can't take it in."
He added: "I have memories of Tommy Burns being just the most happy, family-loving individual I think I've ever met in my life.
"He was always good to me and certainly a character in the dressing room.
"It would be difficult for any Rangers fan, never mind a Celtic fan, to have anything wrong to say about Tommy Burns."
He hailed Burns' playing talent, saying: "He was a fantastic football player.
"He was effective, so effective.
"I think that's why as a coach and a manager he did so well."
Rangers announced they had abandoned plans for a bus tour through Glasgow following their appearance inWednesday night's UEFA Cup final.
In a statement, Rangers said: "In light of the news of the death of Tommy Burns, Rangers Football Club has decided it would be wholly inappropriate to take part in a public procession through Glasgow today.
"The club would like to extend its sincere condolences to the family of Tommy Burns at this very sad time."
The SFA, who Burns served as a national team coach, described him as a "magnificent ambassador" to the game.
"Everyone at the Scottish FA would like to pass on their condolences to the family of Tommy Burns at this very sad time," a statement read.
"Tommy's passing is a great loss and he will be sadly missed by us all. He was a true gentleman and a magnificent ambassador for Scottish football."
Motherwell also expressed their "deep sadness''.
Burns signed Phil O'Donnell from Motherwell in 1994 and spoke of his grief when the Fir Park captain died from heart failure in December.
A club statement read: "Motherwell FC have been all too familiar with grief in recent times and received help from all quarters, including immeasurable support from Celtic and indeed, Tommy Burns himself."
Newcastle coach Terry McDermott revealed how Burns made a huge impact on him when Kenny Dalglish recruited him to the backroom staff at St James' Park.
The former Liverpool player told Sky Sports News: "It's devastating news, not just for the Celtic supporters and Newcastle supporters, but for the whole of football because he was such a lovely man.
"When he came to Newcastle I didn't know him. When Kenny brought him in, I thought, 'Why he has he brought him in?'.
"But it didn't take long to realise - his enthusiasm and knowledge of the game and, more than anything, the type of person he was. He was a fantastic guy and such a hard worker."
Britain's sports minister Gerry Sutcliffe also paid tribute.
"I'm very sad to hear of Tommy Burns' death," said Sutcliffe.
"Tommy was a fantastic player who rightly became a Celtic legend. His death is a great loss for football. My thoughts go out to his family at this time."
Dundee United manager Craig Levein sent condolences from the Tannadice club.
He said: "I knew Tommy was seriously ill, but it is still a shock to hear this.
"He was a decent man and a real football person and all our thoughts right now are with his family."
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