been killed," the country's interim prime minister Mahmud Jibril announced at a hastily organised new conference in the capital, amid cries of "Allahu Akbar" (God is greatest).
"I would like to take this opportunity to call on Libyans to put aside their grudges and proclaim one word: Libya! Libya! Libya!" he added.
There was a carnival atmosphere in nearby Martyrs' Square, where thousands gathered to mark the beginning of a new era, embracing each other, beating drums and chanting in celebration.
"Today is the first day of freedom in our lives. Praise to God. We are so happy. I don't know how to tell you. We suffered too much because of this stupid family," Zainab Ibrahim told AFP, even as more people flooded into the square.
"I am 50 years old, so I have known Gaddafi since I was small. He gave us nothing. No schools. No healthcare. He stole all out money and our oil. We hope, God willing, that he will go to hell," she added, brimming with emotion.
News of Gaddafi's death came as the National Transitional Council's troops overran the last bastion of resistance in Sirte, bringing to an end a two-month siege, and amid claims by NTC commanders that his son Mutassim had also been found dead.
Jibril said Seif al-Islam, another of Gaddafi's sons, was believed to be pinned down in a village near Sirte.
Ali al-Fortass, a fighter from Misrata, returned two days ago from the frontline in Sirte, where he said several of his friends had been badly injured.
"Today is a day of great happiness for all the Arab and Muslim countries. Gaddafi was a dictator and an evil man, who destroyed this country," said the bearded 39-year-old, as he distributed chocolates in Martyrs' Square.
A dozen women descended on the square wrapped in the liberated country's new flag, smiling and ululating.
"The blood of the martyrs has not been spilt for nothing!" they chanted.
In a street nearby, cars lined bumper-to-bumper, horns blaring and drivers and passengers waving the V-for-victory sign, while men and women walked up and down sprinkling water on vehicles and pedestrians.
Perched atop one of the cars, holding a gun in front of him and with friends seated either side, Firas said it was the best day of his life.
"I feel so happy I cannot describe it. Finally we can believe in ourselves. Now we have to throw away our guns and build a new country," said the 23-year-old, who had battled pro-Gaddafi fighters in Bani Walid, the other loyalist redoubt that fell to the NTC forces on Monday.