The father of two retired at the end of last season to spend time with his family as he battled cancer.
The long-serving defender and captain, a plumber by trade, played for his hometown club for more than 10 years making 400 plus appearances, and tributes have been flooding in from current and former team mates and fans alike.
Marshall, who passed away on Wednesday, is survived by wife Kim and children Max and Daisy.
Current City goalkeeper Mike Hale tweeted: “Life is too short. Lost a good man today. Gutted for his family especially the little ones.”
Midfielder Billy Akrigg said: “Sad day! He will always be a hero of mine.”
Former Lancaster City and current Morecambe player Alex Kenyon tweeted: “Absolutely gutted to hear the news about @neilmarshall10. Rest in peace mate! Thank you so much for everything!”
Barrie Stimpson, a former Lancaster City player and manager who was instrumental in bringing Marshall to the club, tweeted: “You RIP Marshy, the pain has gone now big lad. Please don’t anyone tell me life is fair! Love to all the family xx.”
Marshall battled the illness on and off for around five years but was told late last year that he could not have any more surgery on his groin.