Sandra Hevican, who represented the Tividale ward in Sandwell, died on Monday morning after testing positive for coronavirus five weeks earlier.
The 55-year-old, from Wednesbury, had spent the past two weeks in the intensive care unit at Walsall Manor Hospital, where she was in a coma and on a ventilator.
Tributes poured from her colleagues and the general public.
Fellow Tividale ward councillor Lorraine Ashman said: "Sandra was not only a work colleague and working councillor, she was a really good friend, who was highly thought of by us.
"She was reliable, thoughtful and extremely kind. She will be greatly missed, it is a shock to everyone.
"We were the three musketeers in Tividale [with fellow ward councillor Maria Crompton].
"It is hard to take in that she is actually gone. My heart goes out to her family."
Councillor Hevican was a wife, a mother and worked at Wolverhampton Council as a housing benefits officer.
She was also a West Bromwich Albion fan.
Tim Johnson, chief executive of Wolverhampton Council, said her death would give the National Day of Reflection - which happened on Tuesday to mark one year since the UK went into lockdown - an "extra poignancy".
He said: "I was deeply saddened to hear that Sandra had passed away and my thoughts are with her family, as well as her many friends and colleagues here at the council.
"To lose a member of our work family to this terrible disease gave the National Day of Reflection an extra poignancy and she will be very much at the forefront of our thoughts."
Alison Shannon, Wolverhampton Council's chief accountant, added: "She came to work for us in 2000 after moving over from Sandwell Council. We will remember her for her total commitment to her role as well as her kindness, her plain speaking, her sense of fun and for being a big Albion fan.
"Our condolences and thoughts go out to Sandra’s husband Rob and son Greg, family, friends and colleagues at this sad time."
West Bromwich East MP Nicola Richards tweeted: "Really sad news that Councillor Sandra Hevican has passed away after contracting Covid-19.
"My deepest condolences and thoughts are with her friends family at this very difficult time."
Liam Preece, a councillor for Charlemont with Grove Vale ward in Sandwell, also tweeted: "I am shocked and saddened by this news.
"Sandra was a hard working ward member and a good friend to many in the Labour Party. My thoughts are with her family at this tragic time."