Earlier the Doctors had said that the 94-year-old former Tamil Nadu Chief Minister's response to medical intervention over the next 24 hours would determine the prognosis. "All the government offices, schools, and colleges will be closed tomorrow", read the govt statement.
Hundreds of supporters gathered outside the hospital, and there were public scenes of mourning after his death was announced.
"The legacy of the great leader will live on", he said, extending his condolences to the bereaved family and people of Tamil Nadu.
The 94-year-old five-time Tamil Nadu chief minister had been admitted to a hospital in Chennai on July 28 following a dip in blood pressure.
Politics and literature are both a crucial part of M Karunanidhi's life.
Fondly known as Kalaignar (scholar/artist), Karunanidhi began his career as a screenplay writer for Tamil films in the 1940s.
Mr Karunanidhi managed to keep Tamil Nadu in the national spotlight by entering into alliances with the current ruling Bharatiya Janata Party in 1990 and then the Congress in 2004.
The Press Trust of India news agency said a security alert had been sounded across the state, bearing in mind the outbreaks of violence in the past over the deaths of popular figures.
By his 20s, he was making his way into politics, growing close to C.N. Annadurai, the founder of the DMK.
DMK cadres held impromptu protests and engaged in sloganeering demanding a place for Karunanidhi's burial at the Marina beach. Parasakthi, a successful play written by Pavalar Balasundaram, was penned for the screen by Karunanidhi in 1952.
"Ezhundhu Vaa Thalaivaa" (Awake, our leader) and "Vaa, Vaa, Gopalapuram Polaam Vaa" (Come, Come, let's go to Gopalapuram) were among the slogans raised by the emotionally-charged crowd, referring to the locality where the former Tamil Nadu Chief Minister has a house.
Mr Karunanidhi is survived by his two wives and six children.
Actors S.S. Rajendran won a seat in local elections in 1962 and M.G. Ramachandran became chief minister after he left the DMK to set up his own party, the All India Anna Dravida Munnetra Kazhagam (AIADMK), following differences with Karunanidhi.