The veteran breathed his last at 9:30 pm at the intensive care unit (ICU) of Sujay Hospital in Juhu where he was in critical condition after being admitted with age-related illness a few days ago, informed Pritam Sharma, spokesperson for Khayyamji's Trust.
Tributes started to pour in as soon as news of the musician's demise came in.
Calling his demise "saddening", Prime Minister Narendra Modi took to Twitter to extend his heartfelt condolences and express grief over the music icon's death.
"India will remain grateful to Khayyam Sahab for giving us some of the most memorable compositions, which will be remembered forever. He will also be remembered for his humanitarian gestures to support upcoming artists. His demise is extremely saddening," he tweeted.
"Mahan sangeetkar Aur bahut nek dil insan Khayyam sahab aaj humare bich nahi rahe. Ye sunkar mujhe itna dukh hua hai jo main bayaa'n nahi kar sakti.Khayyam sahab ke saath sangeet ke ek yug ka anth hua hai.Main unko vinamra shraddhanjali arpan karti hun," Lata Mangeshkar tweeted.
"Khayyam sahab mujhe apni choti behen maante the. Wo mere liye apni khas pasand ke gaane banaate the.Unke saath kaam karte waqt bahut accha lagta tha aur thoda darr bhi lagta tha kyo ki wo bade perfectionist the.Unki shayari ki samajh bahut kamaal thi, " she added in a subsequent tweet.
Deeply saddened by the demise of Khayyam, music composer Salim Merchant took to his Twitter and wrote, "The Legend Khayyam saab passed away this eve at 9.28 pm. What a huge loss to the Music & Film world. I was by his side all day today with @TalatAziz2 bhai & Bina Aziz. May Allah bless his Soul. Inna Lillahi wa inna ilayhi raji'un."
Mohammed Zahur 'Khayyam' Hashmi, better known as Khayyam, began his career in music from the city of Ludhiana at the tender age of 17. He got his first big break in blockbuster 'Umrao Jaan' through which he made his permanent place in Bollywood industry.
The musician was honoured with Padma Bhushan in the year 2011 and was bestowed the Sangeet Natak Akademi Award in 2007.
He won National Award, and also a Filmfare Award, besides a few other tributes for composing music for the movie which stars Rekha, Raj Babbar, and Naseeruddin Shah.
Khayyam's non-film songs are equally loved by his fans, especially Paaon Padun Tore Shyam
, Brij Mein Laut Chalo
and Ghazab Kiya Tere Vaade pe Aitbaar Kiya
He also gave music for late Meena Kumari's album, 'I Write, I Recite' featuring 'nazms' (poems) sung by her.