He breathed his last at 7.45 a.m. at the Combined Military Hospital (CMH), Inter Service Public Relation Directorate Assistant Director Rashedul Alam Khan told The Daily Star newspaper.
Ershad, also the leader of the opposition in the Parliament and a five-time MP, had long been suffering from various ailments including infection in his lungs and kidneys and was admitted to CMH on June 26 and was kept at the Intensive Care Unit (ICU).
His condition later deteriorated and was kept on oxygen support on June 30.
The military ruler will be buried at an army graveyard in Dhaka on Tuesday.
On April 24, 1982, Ershad usurped state power as the Chief Martial Law Administrator (CMLA) by removing the elected government of then President Abdus Sattar in a bloodless coup, and three days later he installed Justice Abul Fazl Mohammad Ahsanuddin Chowdhury as the President.
Later, Ershad assumed the country's Presidency in December 1983. Following a nationwide mass movement, he was finally forced to step down on December, 6 1990.
He was arrested in 1991 and was released on bail in January 1997.
Ershad was sued in over 26 cases on different charges including corruption.
Later, he was convicted in two cases and while acquitted and discharged from 20 cases during the Bangladesh Nationalist Party (BNP) and Awami League tenures.
Ershad has been a pivotal figure in the political scenario of Bangladesh, especially in forming coalition governments.
( With inputs from IANS )