Cohen, who was 54, was thrown from his motorcycle after a collision with a car in Tel Aviv on December 20.
Doctors declared Cohen brain dead on Tuesday, his son Tamir Cohen said outside Tel Aviv's Ichilov hospital where the former soccer star had been treated.
"To our great sadness, a health ministry committee was in the hospital today and confirmed that our father is indeed brain dead. Which is to say, he has died," a tearful Tamir Cohen announced.
Tamir, who plays for Bolton Wanderers in England, had flown from Britain to be at his father's side.
Cohen's 18-year playing career began in 1974 with Maccabi Tel Aviv. He went on to make 64 appearances for Israel, 33 as captain.
A defender, he played when Israel were affiliated to FIFA's Asia and then Oceania confederations.
It was a period when Israeli clubs and players had very little contact with the top leagues in Europe and he became the first Israeli to play in England's top flight when in 1979 he joined the great Liverpool side of the day.
He made 24 appearances for Liverpool, scoring one goal in the match against Aston Villa that secured Liverpool the 1979-80 league title. He also scored an own goal in the match.
After his two seasons at Liverpool, Cohen returned to Israel and rejoined his boyhood club Maccabi Tel Aviv. In 1988 he briefly played for Glasgow Rangers who were at the time managed by Graeme Souness, a former Liverpool team-mate.
He was chairman of the Israeli Professional Footballers Association for the past eight years and was a regular local radio and television pundit.
Shortly after his death was announced the radio sports programme on which he was a regular played the Liverpool FC anthem "You'll Never Walk Alone" in his honour.