The former football player won every domestic honour in the game with the two clubs during the 1970s and 80s.
Former Liverpool and Arsenal midfielder Ray Kennedy has died aged 70 after a long struggle with Parkinson's disease.
Kennedy, a decorated star at Anfield and in north London, was diagnosed with Parkinson's disease in 1984.
"The thoughts of everybody at Liverpool FC are with Ray's family and friends at this sad and difficult time," Liverpool said on their website on Tuesday.
Kennedy won three European Cups and five English league titles with Liverpool after signing from Arsenal in 1974.
He famously scored a crucial goal in Liverpool's 1981 European Cup semi-final second leg against Bayern Munich, sending the Reds to a final they would win against Real Madrid.
He was also a key figure for Arsenal when they won the top-flight title and FA Cup, beating Liverpool in the final, in 1971.
Kennedy scored 72 goals in 393 appearances during his eight years at Liverpool. With Arsenal, where he started his career in 1968 at the age of 18, Kennedy netted 71 times in 212 games.
A testimonial game between Liverpool and Arsenal was held to aid Kennedy's Parkinson's fight in 1991. Later that year, he sold his medals and 17 England caps to help raise funds for his care.
Kennedy’s illustrious career
Kennedy’s distinguished career was all the more impressive after he was rejected by Port Vale as a youngster.
He returned to his Northumberland roots to work in a sweet factory and play for amateur side New Hartley Juniors before being snapped up by Arsenal.
Port Vale were managed by Stanley Matthews at the time and the England legend later wrote, "Of course, there is always one lad who slips through the net and for me that was Ray Kennedy who went on to find fame and fortune with Arsenal, Liverpool and England.
"Ray turned out to be a superb player, and all I can say in my defence is he was a late developer!"
Kennedy also had spells at Swansea and Hartlepool late in his playing days.
Former Liverpool defender Phil Thompson tweeted, "More sad news with the passing of Ray, what a great player and such a wonderful team-mate RIP pal YNWA."