Kirpal Singh, 50, had allegedly crossed Wagah border into Pakistan in 1992 and was arrested.
He was subsequently sentenced to death in a serial bomb blasts case in Pakistan's Punjab province.
"Kirpal Singh was found dead at his cell in early hours of Monday at Kot Lakhpat Jail," an official of Kot Lakhpat Jail told PTI.
He said the body of Kirpal has been shifted to the Jinah Hospital Lahore for autopsy.
A judicial magistrate was also called who recorded the statements of some prisoners about the death of Kirpal, the official said.
Kot Lakhpath Jail police station head Nafees Ahmed told PTI that the jail authorities had called police to shift the body to the dead house.
"Apparently, it seems the Indian prisoner died of natural death. However, autopsy will tell the exact cause of death," he said.
Ill-fated Kirpal from Gurdaspur has reportedly been acquitted of bomb blast charges by the Lahore High Court but his death sentence could not be commuted because of unknown reasons.
Earlier, in last week of April, 2013, Indian prisoner on death row Sarabjit Singh was brutally attacked and murdered by his fellow prisoners at Kot Lakhpat Jail.
Both accused - Muhammad Muddasar and Amir Tamba also condemned prisoners - are facing trial of his murder at the jail.
Sarabjit was arrested on charges of conducting four bomb blasts in Faisalabad, Multan and Lahore that killed 14 bystanders in 1990. He was sentenced to death.
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