The 66-year-old was battling a serious bout of pneumonia and was on ventilator support, King Edward Memorial (KEM) hospital sources said.
She was in the medical ICU of the hospital located in Parel area of Mumbai.
Shanbaug was rushed out of the tiny room attached to ward number 4 that had been her home for four decades on Tuesday, after nurses attending to her saw she had difficulty in breathing. She was taken to the medical ICU and started on antibiotics.
On November 27, 1973, while working as a junior nurse at KEM Hospital, she was sexually assaulted by a ward boy, Sohanlal Bhartha Walmiki. He had also strangled her with a dog chain, cutting off oxygen supply to her brain.
She was in a vegetative state since the assault.
On 24 January 2011, after she had been in this state for 38 years, the Supreme Court responded to the plea for euthanasia filed by Aruna's friend, journalist Pinki Virani, by setting up a medical panel to examine her.
Virani had narrated the story of the ailing nurse, who hailed from Haldipur in Uttar Kannada, in her 1998 non-fiction book called 'Aruna's Story', while Duttakumar Desai wrote the Marathi play, 'Katha Arunachi' in 1994-95, which was staged under director Vinay Apte in 2002.
Meanwhile, municipal authorities have asked relatives of Shanbaug to contact the hospital staff. Her last known relative, a sister, passed away a few years ago.
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