Mr Hudson had had a stroke and died on Sunday, his family said.
"Paul was dedicated to serving the community, local government, and commerce, and did this with passion for over 50 years," his death notice said.
Mr Hudson was made a Member of the Order of New Zealand in 2014 for services to business and the community.
He worked for Cadbury Fry Hudson between 1973 and 1996.
He held elected positions on Port Chalmers and Dunedin City Councils between 1980 and 2013, including deputy mayor on both councils.
He was also chairman of Dunedin City Holdings for 18 years, when distributions to the council totalled more than $280 million.
Dunedin Mayor Aaron Hawkins today acknowledged Mr Hudson's contribution, saying his death is a loss for loved ones and colleagues, as well as the wider city.
Mr Hudson leaves behind a legacy of public service that can be measured in decades, Mr Hawkins said.
“On behalf of the Dunedin City Council, I want to acknowledge his contribution over many years, and send our aroha and sympathies to his whānau and friends.”
An obituary will follow.
