Notorious Boston gangster James “Whitey” Bulger has died in US federal custody nearly five years after being sentenced to spend the rest of his life in prison.

Officials at the Federal Bureau of Prisons said he died on Tuesday in West Virginia. He was 89.

Bulger led a largely Irish mob that ran loan-sharking, gambling and drug rackets in the Boston area. He also served as an FBI informant.

He became one of the nation’s most-wanted fugitives after fleeing Boston in late 1994.

James "Whitey" Bulger
James “Whitey” Bulger has died (FBI via AP)

After more than 16 years on the run, Bulger was captured at the age of 81 in Santa Monica, California, where he had been living with his long-time girlfriend, Catherine Greig.

In 2013, Bulger was convicted of participating in 11 murders in the 1970s and 1980s and sentenced to two consecutive life sentences.

Bulger was the model for Jack Nicholson’s ruthless crime boss in the 2006 Martin Scorsese movie The Departed.

When the extent of his crimes and the FBI’s role in overlooking them became public in the late 1990s, Bulger became a source of embarrassment for the FBI.

During the years he was a fugitive, the FBI battled a public perception that it had not tried very hard to find him.

Bulger had just been moved to USP Hazelton, a high-security prison with an adjacent minimum security satellite camp in Bruceton Mills, West Virginia.

He had been in a prison in Florida before a stopover at a transfer facility in Oklahoma City. Federal Bureau of Prisons officials and his lawyer had declined to comment on why he was being moved.

Bulger, nicknamed “Whitey” for his bright platinum hair, grew up in a gritty South Boston housing project and became known as one of the most ruthless gangsters in the city.

His younger brother, William Bulger, became one of the most powerful politicians in Massachusetts, leading the state Senate for 17 years.

In working-class “Southie”, Jim Bulger was known for helping old ladies across the street and giving turkey dinners to his neighbours at Thanksgiving. He had a kind of Robin Hood-like image among some locals, but authorities said he would put a bullet in anyone who he even suspected of double-crossing him.

“You could go back in the annals of criminal history and you’d be hard-pressed to find anyone as diabolical as Bulger,” said Tom Duffy, a retired state police major who investigated Bulger.

“Killing people was his first option. They don’t get any colder than him,” said Mr Duffy after Bulger was finally captured in 2011.