Former Supreme Court chief justice and Sathya Sai Central Trust member PN Bhagwati announced in a press release that Sai Baba breathed his last at 7.28am.
Baba's body for darshan will be kept at Sai Kulwant Hall on Monday and Tuesday, Sathya Sai Central Trust announced officially.
Preparations for last rites are under way. Four lakh devotees from India and abroad are expected to arrive.
For the first time since Baba was admitted to Sathya Sai Baba super speciality on March 27, the doctors did not issue a morning bulletin on Sunday.
Sathya Sai Central Trust, which runs social service activities in India and abroad, is to hold a media conference at 11 am.
In the Saturday evening bulletin, the doctors had termed Baba's condition as very critical.
Fearing the worst, hundreds of devotees in the town broke down as their hopes for recovery of the 85-year-old spiritual guru appeared to be fading.
Major industries minister Geeta Reddy and senior government officials rushed to the hospital on Sunday morning and were holding meeting with doctors and trust officials before making an announcement.
The state government has gone on high alert.
More than 6,000 policemen were rushed to the town for deployment and to make arrangements for the visits of VIPs.
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