As tributes from across the political spectrum poured in, the Delhi government announced two-day mourning and a state funeral for Dikshit, who was Chief Minister for three consecutive terms (1998-2013) and remembered as a 'mother figure', 'banyan tree' and 'iron lady'.
Credited for Delhi's growing infrastructure, including roads and flyovers, better public transport system - especially the Delhi Metro, as well as development on the health and educational fronts, during her tenure she had also been Kerala Governor briefly in 2014.
Dikshit, who was currently the Congress' Delhi unit President, suffered cardiac arrest and was brought to the Fortis Escorts Heart Institute around 10.30 a.m. on Saturday morning in a critical condition.
A multi-disciplinary team of doctors, led by the institute's Chairman Ashok Seth carried out advanced resuscitative measures.
"Her condition stabilised temporarily. But she had another cardiac arrest and despite all the efforts, she died at 3.55 p.m.," a hospital statement said.
Hospital sources said Dikshit had visited the facility in the past for check-ups.
"She was suffering from a heart problem for which she had undergone surgeries. Around 10-12 days back, she had visited the hospital for a check-up. She was also admitted for a day then," said the source.
President Ram Nath Kovind condoled her passing, saying she had transformed the national capital in her tenure.
Prime Minister Narendra Modi, who also credited her with noteworthy contribution to Delhi's development, visited her residence along with Lok Sabha Speaker Om Birla to pay his homage.
Delhi Chief Minister Arvind Kejriwal on Saturday mourned her death, saying Dikshit's contribution to the city will always be remembered and she will be much missed.
The calm in posh Nizamuddin (East) was suddenly broken by a stream of visitors headed towards her house there.
As people with moist eyes gathered outside her residence, former President Pranab Mukherjee, Prime Minister Modi, former Prime Minister Manmohan Singh and UPA Chairperson Sonia Gandhi, Kejriwal among others, drove in to pay their tributes.
Senior leaders, including former Home Minister Shivraj Patil, Jyotiraditya Scindia, Sharad Yadav, Sitaram Yechury, Brinda Karat, Yashwant Sinha and Shashi Tharoor, among others, reached Dikshit's residence to offer their tributes.
Gandhi, who spent around five minutes at Sheila Dikshit's residence, met her sister Rama Dikshit and expressed her condolences.
Mukherjee on Saturday expressed shock over her demise, saying "I have lost a long-time friend", while veteran BJP leader V.K. Malhotra said that he had lost his sister.
"She made sure that women got their rights. She worked aggressively for women's rights and security. I have lost my mother," said a weeping Razia Sultana, a former Councillor of the trans-Yamuna area.
Jagdish Sharma, another Congress worker and Dikshit supporter, said that she was like a banyan tree which protected the Congress over the years.
Girish Agarwal, a friend of Sheila Dikshit's son Sandeep Dikshit and owner of the Bengali Sweets franchise, remembered her as an iron lady.
The number of followers could be imagined by the fact that even at about 8 p.m. the queue to get inside the house was only getting longer.
A chirpy Miranda House girl who loved car rides married into a political family and her fortunes changed forever. Daughter-in-law of Congress' Uttar Pradesh stalwart Uma Shankar Dikshit, she was first noticed by the then Prime Minister Indira Gandhi, and later became a "family" loyalist after she worked closely with Rajiv Gandhi.
Born in Punjab, raised in Delhi and honing her politics skills in Uttar Pradesh, the national capital became her work space.
It has been six years since she was voted out of power but there is broad consensus even her political opponents will not disagree that she was the force behind the transformation of Delhi, bringing an infrastructural revolution in the city.
Her death will also impact the Congress' aim of staging a comeback in Delhi, where Assembly elections are due next year.
( With inputs from IANS )