Kaufman, who had been in failing health, died at 12:20 p.m. at Lenox Hill Hospital, a spokeswoman for the restaurant told the paper. She died from complications tied to emphysema.
Born in 1929, Kaufman grew up in Queens and spent her early years hanging out backstage at theaters around the city. She opened Elaine's in 1963 with just $12,000 and the restaurant quickly became a go-to spot for writers in the area. Kaufman was known for taking care of a group of writers and reporters that included Norman Mailer, Kurt Vonnegut, Gay Talese, Nora Ephron and David Halberstam.
"Elaine was a New York institution," New York City Mayor Mike Bloomberg said.
Until her hospitalization last month, she was worked seven days a week, greeting customers and working until close.
A memorial service is expected to take place sometime next year.