Horst Koehler, former German president from 2004 to 2010 and a respected global policymaker with a particular interest in Africa, died on Saturday after a short illness at the age of 81, the federal presidential office said in a statement.

Born in 1943 in German-occupied Poland, Koehler spent most of his early years living in refugee camps with his family before settling in Ludwigsburg, Baden-Wuerttemberg.

A trained economist and member of the Christian Democrats, Koehler rose to the position of deputy finance minister under ex-Chancellor Helmut Kohl, playing a key role in bringing the West German mark to East Germany after communist rule collapsed in 1990.

Koehler became managing director of the International Monetary Fund in 2000, a post he held for four years before being nominated for president in 2004.

As president, he was not afraid to defy the government, dissolving parliament in 2005 to call new elections and accusing then-Chancellor Angela Merkel in 2007 of not preparing the country sufficiently for globalisation.

But he stepped down a year into his second term after he was criticised for stating in a radio interview that foreign military action by the German army also served the country's economic interests.

Still, despite being a largely unknown figure before assuming the presidency, Koehler quickly proved himself in opinion polls to be one of Germany's most popular political figures.

"It was his belief in the strength of our country and in the energy and creativity of its people that allowed him to win so many hearts," German President Frank-Walter Steinmeier said in a statement on Saturday.