US President Barack Obama described Lee, who ruled Singapore for three decades, as "a true giant of history" whose advice on governance and economic development had been sought by other world leaders down the years.
Lee had receded from public and political life over the past few years, but he was still seen as an influential figure in the government of Prime Minister Lee Hsien Loong, his oldest son.
In his lifetime, Lee drew praise for his market-friendly policies but also criticism at home and abroad for his strict controls over the press, public protest and political opponents.
Lee had receded from public and political life over the past few years, but he was still seen as an influential figure in the government of Prime Minister Lee Hsien Loong, his eldest son.
"The first of our founding fathers is no more. He inspired us, gave us courage, and brought us here," a choked prime minister Lee said in a live television address on Monday. "To many Singaporeans, and indeed others too, Lee Kuan Yew was Singapore."
Lee died at 3.18am at Singapore General Hospital, where he had been admitted on Feb 5 suffering from pneumonia.
The government has declared a period of national mourning until his funeral on Sunday. Lee's family will hold a private wake in the next two days, then his body will lie in state at parliament from Wednesday to Saturday.
Singaporeans had been bracing for the news for days, and a sea of flowers had already piled up at the hospital where he was being treated.
"I'm so sad. He is my idol. He's been so good to me, my family and everyone," said Lua Su Yean, 64. "His biggest achievement is that from zero he's built up today's Singapore."
Little patience for dissent
Lee, a British-educated lawyer, is credited with building Singapore into one of the world's wealthiest nations on a per capita basis with a strong, pervasive role for the state and little patience for dissent.
He was unapologetic for the more draconian side to his leadership and clamping down fiercely on his opponents, saying it was essential for the country's security.
"We have to lock up people, without trial, whether they are communists, whether they are language chauvinists, whether they are religious extremists. If you don't do that, the country would be in ruins," he said in 1986.
Among other hardline measures, long hair for men was outlawed in the 1970s - the Bee Gees and Led Zeppelin cancelled gigs due to the ban - and chewing gum remains on the forbidden
list today. Graffiti is punishable by caning.
"He managed to create a system out of chaos when Singapore was starting out," said Isaac Seow, 29, outside the hospital. "For me, his most defining trait was his iron will. Love him or
hate him, he's got the job done."
Lee's leadership was seen as a model for many developing countries across the world, and politicians of all stripes said they took inspiration from his policies.
"Minister Mentor Lee's views and insights on Asian dynamics and economic management were respected by many around the world, and no small number of this and past generations of world leaders have sought his advice on governance and development," Obama said in a statement.
Thousands are expected to pay their respects at the Istana, which means palace in Malay and is the site of the prime minister's official residence, where a condolence book has been set up.
"My tears welled up as I received the sad news," said another former Singapore prime minister, Goh Chok Tong, who succeeded Lee. "He was my leader, mentor, inspiration, the man I looked up to most," Goh posted on Facebook.
Dozens of world leaders are expected to travel to the city-state for Lee's funeral, which will be held at the National University of Singapore.
"His place in history is assured, as a leader and as one of the modern world's foremost statesmen," Britain's Prime Minister David Cameron said in a statement.
"He was always a friend to Britain, if sometimes a critical one, and many British prime ministers benefited from his wise advice, including me."
Controversial views
"Harry" Lee became Singapore's first prime minister in 1959 and held onto power for 31 years, overseeing the island's transformation from a port city battling crime and poverty into one of Asia's most prosperous nations.
Even after stepping down as leader in 1990 - signing off as the world's then longest-serving prime minister - the acerbic Lee stayed on in the cabinet until 2011. He was a member of parliament until his death.
Lee, a fourth-generation Singaporean, co-founded the People's Action Party (PAP), which has ruled the city since 1959 and led the newly born country when it was separated from Malaysia in 1965.
He stepped down as prime minister in 1990, handing power to Goh Chok Tong, but remained influential as senior minister in Goh's cabinet and later as "minister mentor" when his son became prime minister in 2004.
The older Lee left the cabinet in 2011 and had cut down his public appearances in recent months.
Lee was renowned for his wit and firebrand comments. He had few kind words for former Malaysian prime minister Mahathir Mohamad, and he dismissed the "dull life" of New Zealanders.
He wrote a handful of books and voiced strong opinions on everything from eugenics and the "slothful" sport of golf to fengshui and astrology, which he decried as "utter rubbish!"
His sharp tongue
On death
"Even from my sick bed, even if you are going to lower me into the grave and I feel something is going wrong, I will get up."
On government
"I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn't be here today. And I say without the slightest remorse, that we wouldn't be here, we would not have made economic progress, if we had not intervened on very personal matters - who your neighbour is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think."
On press freedom
"Go on the Internet, you can publish your party's views, you can produce your party magazines, your party newspapers, nothing to prevent you from doing all that. But if you commit anything libellous, we'll sue you. Anything which is untrue and defamatory, we will take action.
"The foreign media used to say we are dull, sterile, no fun, no buzz, now they are moving away from these descriptions. But we are not moving away from our base positions. We are not going to quail under their sustained attacks. If you quail, you're weak and a fool."
On democracy
"In new countries, democracy has worked and produced results only when there is an honest and effective government, which means a people smart enough to elect such a government. Remember, elected governments are only as good as people who choose them."
On homosexuality
“Sex between two men is illegal in Singapore and punishable with up to two years in prison, though it is rarely enforced.”
On golf
"I used to play golf, but found it did not give me vitality because it's a slothful game.
"Nine holes of golf will take you one-and-a-half, two hours. I run in 20 minutes, I feel better off. So the cost benefit made me drop golf."
On chewing gum
"If you can't think because you can't chew, try a banana."
On Singapore
"Singapore is my concern till the end of my life. Why should I not want Singapore to continue to succeed?
"I have no regrets. I have spent my life, so much of it, building up this country. There's nothing more that I need to do."
- Reuters
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