The news was confirmed by King Diamond, who said his friend died after a long battle with cancer.
The message reads: “I just found out that I lost one of my dearest friends, who has been fighting cancer for a long time, in such an incredibly brave way.
"He was not just my roommate on the early Mercyful Fate tours, but he was always my favourite bass player of all time.
“I was fortunate to have been able to visit him at his apartment with some other good friends and we had a great afternoon that will never be forgotten."
He adds: “When I last talked to Timi on the phone on October 24, I could understand that things had gotten tougher than they ever were, and yet he said, ‘We fight on.’
“I feel so so sad for his entire family – you have my absolute deepest sympathy. Rest in peace my dear, dear friend.”
Hansen played on Mercyful Fate’s self-titled EP in 1982 and went on to appear on their 1983 debut album Melissa and 1984’s Don’t Break The Oath.
Mercyful Fate split in 1985, with King Diamond going on to form his own band, bringing Hansen and guitarist Michael Denner with him.
Hansen subsequently appeared on King Diamond’s 1986 debut album Fatal Portrait and the classic Abigail in 1987.
When Mercyful Fate reformed in 1993, Hansen once again took up bass duties, playing on In The Shadows which was released the same year.
Metallica drummer Lars Ulrich paid tribute to Hansen on social media, saying he was "incredibly saddened" to hear the news.
Ulrich added: "He was not only a close friend of mine and a close friend of the band’s, but he was part of a musical force that helped shape Metallica’s sound, direction and desire to be in a hard rock band.
"Timi was of course the original bass player in Mercyful Fate, who most of you hopefully know have played a significant role in our history. Along with his fellow bandmates, King, Hank, Michael and Kim, they welcomed us to Denmark in 1984 with open arms, let us use their rehearsal studio where we wrote songs for the Ride the Lightning album, leant us their equipment, showed us the best of Copenhagen and became our partners in crime.
"Over the years we enjoyed endless amounts of incredible moments together, including an almost complete reunion at our 30th anniversary shows at the Fillmore in 2011. And ultimately, again as most of you know, we recorded 12 minutes of their finest musical moments as the track Mercyful Fate on the Garage Inc. album in 98 and have enjoyed playing that occasionally over the years with various members joining us for their respective parts.
"Rest in peace."