The 32-year-old was a regular on the worldwide road racing scene, following in the footsteps of his father Robert and Uncle Joey.
The 32-year-old father-of-one died when he crashed on the closed road system near Skerries in County Dublin.
Councillor Darryl Wilson, from Ballymoney in Co. "William was a hero to many in these parts and the community will be devastated at this news", he said.
UUP leader Robin Swann expressed his deepest sympathies to the Dunlop family in the wake of "another road racing tragedy".
Liam Beckett, a former mechanic of Robert Dunlop and close friend of the family, said he was "heartbroken" over the tragic death.
William Dunlop is survived by his girlfriend Janine and their daughter Ella.
"Following discussion with the family, their sponsors and fellow riders, the Loughshinny Motorcycle Supporters Club Ltd have taken the decision to continue with the Skerries 100 on the 8th July. In the last couple of years William lived for Janine and his handsome wee daughter, Ella".
His father was also killed following a crash at the North West 200 in 2008.
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Well-known Northern Ireland motorcycle racer William Dunlop has been killed following a crash during a "practice run" at a road race in Co. William's brother, Michael, has accumulated 18 victories on the same mountain course. The practice session was immediately halted, with medics and gardai quickly attending.
Originally announcing that he was withdrawing to recover from injuries sustained at the North West 200 just weeks prior, he later revealed he left the island to be with his partner during a period of uncertainty over the health of their unborn child.
"Motorcycling was his life and he will be forever remembered for his many achievements, both in Ballymoney and across the world", she tweeted. William lost his uncle, Joey, to a crash on the Pirita-Kose-Kloostrimetsa Circuit in Estonia in 2000.
"Everyone's thoughts are with the family".
The race weekend attracts thousands of spectators to the area each year.
Not only did William clinch countless wins at the smaller road races, he was also able to make the step up at global level, like Joey and Robert before him and just as his younger brother Michael has done over the past 10 years.
"William's machine seemed to have suffered some sort of major failure and oil sprayed everywhere", he said. It's a family very much in our thoughts right now.