Athaiya, who was 91 hit the headlines for winning an Oscar for her elaborate work in the 1983 film ‘Gandhi’.
Her daughter, Radhika Gupta in a statement to PTI, said that the designer passed away peacefully in her sleep.
The last rites took place at the Chandanwadi crematorium in South Mumbai on Thursday.
“She passed away early this morning. Eight years ago, she was diagnosed with a tumour in her brain. For the last three years, she was bedridden because one side (of her body) was paralysed,” her daughter added.
Athaiya, was born in Kolhapur and began her career as a costume designer in Hindi cinema with Guru Dutt’s 1956 superhit ‘C.I.D.’.
She won the Academy Award for Best Costume Design in Richard Attenborough’s ‘Gandhi’ along with John Mollo, making her the only Indian woman to win an Academy Award till date.
In 2012, Athaiya returned her Oscar to the Academy of Motion Picture Arts and Sciences for safe-keeping.
In a career spanning five decades and over 100 films, she won two National Awards – for Gulzar’s mystery drama ‘Lekin’ (1990) and the period film ‘Lagaan’ directed by Ashutosh Gowariker (2001).
With inputs from PTI