The 56-year-old legend was battling for life after a bout of jaundice and dengue made his condition worse. Earlier this month, he was airlifted from Varanasi and admitted to the Gurgaon hospital.
Shahid was on the ventilator and died at 10:45 am on Wednesday.
Sports Minister Vijay Goel met Shahid last week and enquired about ailing legend's health. Goel's predecessor Jitendra Singh had announced a grant of Rs 10 lakh for Shahid.
Besides, the Railways, where Shahid is an employee, has announced that his medical expenses will be taken care of.
Known for his dribbling skills, Shahid was member of the V Baskaran-led Indian team that won a gold medal at the 1980 Moscow Olympics.
Saddened to hear about the passing of great hockey player Mohd Shahid. One of India's greatest sportsmen. Condolences to his family, friends— Mamata Banerjee (@MamataOfficial) July 20, 2016
Earlier, former Indian hockey team skipper Dhanraj Pillay had appealed to the Prime Minster along with other inistries and associations, seeking help for the treatment of the Arjuna award winner who was suffering from chronic liver and kidney problems.
on Tuesday (July 5) thanked Prime Minister Narendra Modi, the Sports Ministry and Indian Railways for providing financial assistance to Mohammad Shahid.