Austrian "Big" Max Zechmann, 56, a former caddie on the European Tour, received on-site treatment from a medical team before being rushed to hospital, where he was later pronounced dead.
The cause of his death was not immediately made public, but local media said he had a heart attack.
"Everyone at the Ladies European Tour is extremely shocked and saddened today by this sudden death and therefore we have taken the decision to suspend first-round play as a mark of respect," said Ladies European Tour CEO Ivan Khodabakhsh.
"On behalf of our membership, we offer heartfelt condolences to the individual’s family and loved ones."
There was an outpouring of grief within the golf world, with many of the sport's biggest names offering their condolences.
"Very sad to see the passing of another caddie. Done many rounds with Big Max. Thoughts go out to his family and friends," tweeted Britain's Ian Poulter.
Thomas Bjorn, who was named captain of the European team at the 2018 Ryder Cup on Tuesday, tweeted: "Dreadful news out of Dubai this morning. Thoughts are with loved ones and everyone involved."
Dubai-based Zechmann, who was caddying for France’s Anne-Lise Caudal at Emirates Golf Club, is survived by his wife Elinor and three sons.
American Beth Allen, who is assured of winning the Order of Merit this week, said there was no question that the first round of the tournament should be halted.
"I 100 percent agree with the decision that was made out of respect for him and his family. I don’t think anybody has any qualms about it," she said.
Play will resume on Thursday and the tournament will now be played over 54 holes.
Among those who had started their rounds, which was delayed by an hour because of fog, were England’s Florentyna Parker, who was seven-under par after nine holes, and Tiger Woods’ niece Cheyenne Woods, who was second at four-under par after six.
In May 2014 veteran caddie Ian MacGregor died of a heart attack while caddying for Scotland's Alistair Forsyth at the Madeira Islands Open in Portugal.
Original source: Caddie dies after collapsing at Dubai Ladies Masters