Gen Marcel Bigeard, 94, died on Friday, his wife told news agency Agence France-Presse.
Gen Bigeard was a commanding officer during the battle of Dien Bien Phu and the Battle of Algiers.
In 2000 he caused controversy in France by telling a newspaper that torture was a "necessary evil" in Algeria.
Gen Bigeard began his military career as an enlisted man, and retired from the army as State Secretary for Defence.
He was called up into the army at the outbreak of World War II and was captured in the Battle of France in 1940.
He managed to escape and joined the Free French in North Africa. From there he was parachuted back in to France to fight with the Resistance.
It was in French Indochina that Gen Bigeard began to make his name as a commander in a Paratroop regiment.
He survived the 1954 Battle of Dien Bien Phu, where French troops were surrounded and defeated by the forces of the Vietnamese Communists, the Viet Minh.
He was then sent to Algeria where he led the "irregular" counter-insurgency campaign against the National Liberation Front (FLN) during the 1957 Battle of Algiers.
He later told Le Monde newspaper that it was "necessary" to torture suspected FLN sympathisers to extract information about bombings carried out by the Algerian insurgents.
In 1975 he was appointed State Secretary for Defence by President Valery Giscard d'Estaing.
He retired from the army in 1976.
He was believed to be one of the most decorated soldiers in France and had received medals from both France and Britain for his wartime service.
One of the most decorated French soldiers, who fought in the country's wars in Algeria and French Indochina, has died.