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A brief statement from the PBM team said Bird died earlier on Friday having been hospitalised with illness.
"PBM is deeply saddened to announce the sudden passing of Paul Bird, the team owner of Paul Bird Motorsport.
"Paul Bird died earlier today at the age of 56 following a short time in hospital with illness. Paul's family are requesting privacy during this time."
Bird was most associated with BSB, in which his PBM Racing team won eight riders' titles.
PBM's first success came with the late Steve Hislop in 2002, before Shane Byrne – who replaced Hislop – scored the first of his five titles with the team in 2003.
Byrne won again for the team in 2012, adding three further titles to his career tally of six in 2014, 2016 and 2017.
PBM would be champion again in 2019 when it signed ex-MotoGP rider Scott Redding to ride its Ducati, with Josh Brookes making it back-to-back titles the following season.
Paul Bird's outfit also managed Kawasaki's factory World Superbike entry from 2009 to 2011, though Provec would take over from 2012 when two of PBM's race trucks were found to have been loaded with drugs, guns and ammunition as it tried to enter the UK.
Bird told Motorcycle News at the time that a gang had planted the contraband on his trucks, while the driver – Phil Roe – was sentenced to 18 years in prison.
PBM would move to MotoGP in 2012 at the advent of the CRT (Claiming Rule Team) regulations, fielding James Ellison on an Aprilia ART machine – achieving a best finish of ninth on two occasions.
The team carried on in 2013 with Michael Laverty and Yonny Hernandez, with Broc Parkes replacing the latter for 204 before PBM pulled out of grand prix racing.
Bird also enjoyed TT success with Ian Hutchinson in 2015, and competed in national rallies in the UK. Bird’s team’s time on the roads also led to TT victories with the likes of John McGuinness and Joey Dunlop.
However, he was handed a drugs ban in 2019 which was due to run until 2026.
PBM currently leads the standings in BSB with Tommy Bridewell and Glenn Irwin. It is unclear yet what the team's plans will be moving forward, with the next round set for 15-17 September at Oulton Park.