Gary Firth, 50, and from Barnsley, was killed in a crash at the 11th Milestone on the TT Course, at about 13.45 BST.
The Senior race was immediately red flagged by the clerk of the course.
Firth finished 34th in the Newcomers A race earlier this week and had recorded his fastest lap of 102.282mph in the Friday's Senior race.
Organisers the Manx Motor Cycle Club said they pass on their "deepest sympathy to his family and friends".
The Coroner of Inquests has been informed and an investigation into the circumstances of the accident is under way.
Two other riders were involved in the incident but were reported as ok by organisers.
In a separate incident Alun Thomas crashed at Alpine Cottage and was taken by helicopter to hospital where he was reported to have "multiple fractures" but is in a "stable condition".
Clerk of the course Phil Taubman confirmed the race would not be rerun and the result has been declared at the end of the second lap.
It means Loughborough's Andrew Soar, who led the race after two laps (the last completed by the whole field), has been awarded the victory ahead of Michael Moulai with Rob Hodson third.
All three riders, who were contesting the lead when the race was red flagged, said their thoughts were with those involved in the earlier accidents.
Although the roads were mainly dry, riders were warned about possible damp patches at Laurel Bank, Ramsey Hairpin, Hillberry and the Nook as well as strong winds, particularly on the Mountain section of the course.
The subsequent Manx Grand Prix reunion parade has been cancelled and all roads are now open around the course.
Three riders have lost their lives at this year's Isle of Man Festival of Motorcycling, which incorporates the Classic TT and Manx Grand Prix.

Auckland-born Quinn, 22, holds a UK passport and will not therefore count as an overseas player.
He is the first signing by the county since Thursday's appointment of former England paceman Chris Silverwood as head coach.
"Matt is a tall, fast bowler who can swing the ball. We've made no secret of the fact we want to bolster the bowling attack," said Silverwood.
"Having looked at Matt play, alongside his record in New Zealand, he's got a good pedigree."
Essex have had quite an overhaul since the appointment of former captain Ronnie Irani as their new cricket committee chairman.
England one-day international Reece Topley has joined Hampshire, while former skipper Mark Pettini has moved to Leicestershire and former England spinner Monty Panesar, Greg Smith, Matt Salisbury and Saf Imtiaz were all released at the end of last season.
But slow left-arm spinner Aron Nijjar and young fast bowler Aaron Beard have both signed their first professional contracts, while England all-rounder Ravi Bopara, opening batsman Jaik Mickleburgh, limited-overs captain Ryan ten Doeschate and England Under-19 all-rounder Callum Taylor have all agreed new deals.
A motorcyclist from Yorkshire has been killed during the Senior Manx Grand Prix race in the Isle of Man.
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Essex have signed New Zealand A fast bowler Matt Quinn on a three-year deal.