Ultimatte, the company that Vlahos founded during the 1970s, confirmed that its founder passed away on Sunday (February 10).
Born in New Mexico on August 20, 1916, Vlahos worked for aerospace company Douglas Aircraft and Bell Laboratories during the Second World War, joining MGM after the war ended.
Having developed the blue-screen 'colour difference' system for Ben-Hur in 1959, Vlahos was honoured with an Oscar for the technology in 1964, and won a second Oscar for its electronic counterpart in 1994.
His special effects innovations were used in Disney films such as Mary Poppins and Bedknobs and Broomsticks - allowing live actors to appear with animated characters - plus movies such as The Birds, the original Star Wars trilogy, the early Indiana Jones movies and Dick Tracy.
A former chief scientist for the Motion Picture Research Council, Vlahos was honoured with the Gordon E Sawyer award - presented to recognise lifetime achievement in motion picture technology - in 1993.
He is survived by his wife Virginia, son Paul, with whom he co-founded Ultimatte, daughter Jennie and two step-children, plus several grandchildren and great-grandchildren.
Watch Petro Vlahos's technology in action in Mary Poppins below: