Buckingham Palace announced the news on Thursday evening and play in the first round at Wentworth was immediately suspended with 30 players on the course.
The course and practice facilities will be closed on Friday, with tournament organisers adding that updates on the resumption of play will be "provided in due course".
A statement from the European Tour Group read: "On behalf of our members and everyone connected with the European Tour Group and the BMW PGA Championship, it is with great sadness that we have learned of the passing of Her Majesty Queen Elizabeth II.
"She truly was an inspiration to people the world over.
"Out of respect for Her Majesty and the Royal Family, play has been suspended at the BMW PGA Championship at Wentworth Club for the remainder of Thursday and flags at Wentworth Club will be lowered to half-mast.
"Our deepest sympathies and condolences are with the Royal Family at this time."
Tommy Fleetwood, who held a share of the lead with Viktor Hovland and Andy Sullivan on eight under par, wrote on Twitter: "Rest in Peace Your Majesty, you will be forever in our hearts. God save The King."
Former Ryder Cup captain Thomas Bjorn wrote: "Living most of my adult life in England I'm deeply saddened by the passing of Queen Elizabeth. An inspiration to so many all over the world. Rest in peace, Your Majesty."
Peter Forster, captain of The Royal and Ancient Golf Club said the Queen's 70-year patronage was a "great honour".
"We are greatly saddened to learn of the passing of Her Majesty today," he said in a statement.
"Following her accession in 1952, Her late Majesty graciously accepted the Patronage of The Royal and Ancient Golf Club of St Andrews, as has been the custom of reigning monarchs since HM King William IV in 1834.
"Although not a golfer, Her late Majesty's 70-year patronage of the club was a great honour for its members. We hold His Majesty The King and all the Royal family in our thoughts at this time of mourning."
The Queen was a patron of the Professional Golfers' Association and chief executive Robert Maxfield paid tribute, saying in a statement: "On behalf of the members and staff of The PGA, I would like to offer our deepest sympathies to the Royal Family.
"We are immensely proud that Her Majesty The Queen was a Patron of The Association."