Bhattacharya, who died on Monday night, had been hospitalized in Mumbai for over five months.
Also a former Aam Aadmi Party (AAP) member, she is survived by her husband and two daughters. and her last rites will be performed here later Tuesday.
The second woman IPS in the country after Kiran Bedi, Bhattacharya was a 1973 batch officer and created a record when she became the DGP, Uttarakhand in 2004 - the first female police officer in India to attain the position.
A native of Amritsar, Bhattacharya was keenly interested in joining the police force and went all out to achieve her ambition.
During her tenure as DGP of Uttarakhand, she supported the downtrodden, combated bias against women and implemented the policy of female home guards manning traffic.
After her retirement in October 2007, she took the political plunge and contested the 2014 Lok Sabha polls unsuccessfully as an AAP candidate from Haridwar.
Her life and struggles as a policewoman were brought in vivid details in a tele-serial, "Udaan" made by her younger sister Kavita Chaudhary, in which Bhattacharya made a guest appearance.
The Uttarakhand Police on Tuesday condoled Bhattacharya's death and also recalled her great contributions during her tenure as DGP.
In a statement, the IPS Association (IPSA) mourned the demise of "one of our icons, the first lady DGP and the second lady IPS officer of India".
"An officer with sterling qualities of head and heart, she had an illustrious career, adorned with many first and awards," the IPSA said.
AAP President and Delhi Chief Minister Arvind Kejriwal also condoled the death, saying in a tweet: "Saddened to know about the passing away of the country's first woman DGP Kanchan Chaudhary Bhattacharya. She remained active in public life after her retirement and wanted to serve the country till her very last. Will miss her."
During her 33-year-long police career, she was awarded the President's Police Medal in 1997, served with the CISF and represented India at an InterPol meet in Mexico in 2004.
( With inputs from IANS )