The rejection of an appeal in 2008 meant Neilson was never releasedDonald Neilson, the serial killer known as the Black Panther, has died, the Ministry of Justice has said.
The 75-year-old died on Sunday after being taken from Norwich Prison to hospital with breathing difficulties.
Neilson was convicted of four murders, including that of 17-year-old kidnap victim Lesley Whittle, who was snatched from her Shropshire home in 1975.
Three years ago he lost an appeal to have his life sentence, imposed in 1976, reduced to 30 years.
A Prison Service spokesman said Neilson was taken to hospital in the early hours of Saturday after suffering breathing difficulties and was pronounced dead at 18:45 GMT on Sunday.
"As with all deaths in custody, the independent Prisons and Probation Ombudsman will conduct an investigation," he said.
The Bradford-based man murdered 17-year-old heiress Lesley Whittle in 1975, having shot dead three sub-postmasters during armed robberies between February and November 1974.
He was responsible for some 400 burglaries, including many sub-post offices.
Neilson, who had been a builder, kidnapped Miss Whittle from her home in Shropshire and left a ransom demand for £50,000.
The teenager's body was later found in an underground drainage system hanging from the bottom of a ladder, to which Neilson had secured her by the neck with wire.
'Horrific ordeal '
In 2008, High Court judge Mr Justice Teare ruled the killer must never be released from prison, saying: "This is a case where the gravity of the applicant's offences justifies a whole life order."
The judge said the three murders of sub-postmasters "involved a substantial degree of premeditation" because Neilson took a loaded firearm with him which he was prepared to use.
Mr Justice Teare added: "The manner in which the young girl was killed demonstrates that it too involved a substantial degree of premeditation or planning. It also involved the abduction of the young girl."
The location and manner of Lesley Whittle's death "indicates that she must have been subjected by the applicant to a dreadful and horrific ordeal", he said.
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