Mayor Hsu Tsai-li was pronounced dead shortly after he was rushed to Keelung Hospital from his home at around 7:30 a.m., according to the hospital. He was 60.
As Hsu -- sworn in for a second term in December 2005 -- had not completed half of his four-year term, a by-election will have to be held within three months, according to election authorities.
The provincial election body, which directly oversees voting in the northeastern port city, has tentatively slated May 12 for the by-election.
The controversial mayor was convicted and given seven years by the Keelung District Court in September under corruption charges for gaining undue profits by selling his own land to the city's bus authorities.
The verdict came as a huge embarrassment for KMT Chairman Ma Ying-jeou, who had vouched for Hsu's integrity during the Keelung mayor's reelection campaign in 2005.
Ma's strong backing was believed to be a major factor contributing to Hsu's reelection victory at the expense of contenders from both the ruling Democratic Progressive Party and the KMT's ally, the People First Party.
The KMT swiftly revoked Hsu's party membership, as required by party rules.
Later the KMT agreed to launch a recall campaign against Hsu under mounting pressure from the DPP, which kept demanding the main opposition party take more severe actions.
Hsu defended his innocence, and vowed never to step down. His relations with Ma and the KMT soured.
All sides who had criticized Hsu for his alleged corruption, extended their condolences to his family yesterday.
But the KMT, DPP, and PFP are ready to kick off their campaigns for the post left vacant by Hsu's death.
Acting KMT Chairman Wu Poh-hsiung expressed shock and regret over the sudden death of a "close personal friend," according to party spokesman Su Chun-pin.
But the family showed "strong resentment" when officials from the KMT's Keelung chapter paid tribute to Hsu on behalf of the party headquarters, Su said.
Ma, who has just stepped down as KMT chairman after he was indicted for corruption, said he can understand the Hsu family's reactions, but he still plans to visit the family to extend his condolences, Su added.
The KMT has yet to work out any plans for the by-election, but it will handle the race taking into consideration Keelung's political "eco-system," Su said.
PFP spokesman Lee Hung-chun said his party hopes to work out a partnership scheme with the KMT for the Keelung mayoral race.
The upcoming poll will be an indicator of the feasibility of an election alliance both the KMT and PFP had agreed to form for the year-end legislative race and next year's presidential election, Lee said.
He stressed that the PFP will not be absent from the by-election.
"Hsu earned both praise and criticism during his mayoral stint. But as he has passed away, while the PFP feels deep regret, our concern is that Keelung's citizens need an excellent leader," said Lee.
PFP Legislator Liu Wen-hsiung, who harshly criticized Hsu after losing the 2005 Keelung mayoral race, said he would not make any comment at the moment to avoid "agitating" Hsu's family.
DPP Chairman Yu Shyi-kun already expressed his condolences to Hsu's family, according Tsai Huang-liang, secretary-general of the ruling party.
Tsai said the DPP will not definitely take part in the upcoming poll, but the party's Keelung chapter will be fully in charge of the planning for the by-election campaign and in naming the candidate.
The Taiwan Solidarity Union said it may not field a candidate, and may instead support the DPP's campaign, said TSU Secretary General Chien Cheng-shan.
The Central Election Commission said although May 12 has been tentatively set as the date for the by-election, the provincial election body will have to discuss the schedule further before finalizing the date.