Jayaram Jayalalithaa, who enjoyed almost God-like status among her followers, died after two months of illness. Crowds had gathered in the thousands since her condition worsened.
Jayaram Jayalalithaa, one of India's most powerful and revered politicians, died on Monday night after a "massive" cardiac arrest, doctors said.
The South Indian actress who ascended politics to become Chief Minister of Tamil Nadu state, died in Apollo Hospital in Chennai after a prolonged illness.
"It is with indescribable grief, we announce the sad demise of our esteemed honorable chief minister of Tamil Nadu ... at 11:30pm today," the hospital said in a statement.
The 68-year-old, who was known by her fiercley-loyal followers as "Amma" or "Mother", was admitted to hospital in September suffering from a fever, dehydration and a respiratory infection.
Hundreds of devotees kept a vigil at the hospital, crying, fasting and praying for her recovery. Numbers swelled into the thousands after her condition worsened on Sunday and she was put on a life-support system.
Prime Minister Narendra Modi offered his condolences.
"I will always cherish the innumerable occasions when I had the opportunity to interact with Jayalalithaa ji [an honorific bestowing respect]. May her soul rest in peace," Modi said on Twitter.
Her political party on Twitter said: "our beloved leader, the iron lady of India... Amma, is no more."
Her body will be taken to a public hall in the city for people to pay their last respects, the All India Anna Dravida Munnetra Kazhagam party announced.
Chennai news channels showed images of men and women crying after the hospital confirmed her death.
A polarizing figure
Jayalalithaa began her prolific film career at the age of 13, quickly gaining popularity and working on nearly 150 productions.
She entered politics in the early 1980s, declaring herself the successor of fellow popular actor-turned-politician Marudur Gopalan Ramachandran and becoming one of the country's most polarizing politicians.
She won adoration from voters in Tamil Nadu state for combating poverty with a series of highly populist schemes, such as "Amma canteens" that provided lunch for just three rupees (four euro cents), and with gifts such as laptop computers and livestock.
Such gifts are common in Indian politics but detractors accused her of wasteful pandering and unfair bribery.
For nearly 14 years she served in the highest elected position in Tamil Nadu, a state of 71 million people.
Police raided her home as part of a corruption investigation in 1997, finding more than 10,000 saris and 750 pairs of shoes. She was jailed in 2014, sparking mass protests, hunger strikes and cases of self harm among her supporters.
Her conviction was later overturned on appeal.
Lifelong loyalist and trusted cabinet aide, O Panneerselvam, was sworn-in as the chief minister of the state early Monday morning.
aw/bw (AP, AFP, dpa)