She was 50 and was undergoing treatment for cancer, hospital sources said.
The dancer is survived by a daughter. Her husband, Subramaniam Potti had predeceased her.
Margi Sathi, the doyenne of the exotic dance form of Nangiarkoothu, an offshoot of Koodiyattam, the ancient temple art form, had contributed immensely to the evolution of a strong feminine narrative.
Breaking barriers, Sathi emerged as the leading woman artist, choreographer and teacher of the classical Koodiyattam theatre, recognised by the UNESCO as a unique artistic heritage of entire humanity.
She trained at Kalamandalam for 8 years under gurus Painkulam Rama Chakyar, Mani Madhava Chakyar and Ammannur Madhava Chakyar.
In 1988, Sathi joined Margi, in Thiruvananthapuram.
Among the plays she had conceptualised are 'Sreeramacharitham' (the story of Rama from Sita's point of view), 'Sitayanam' and 'Kannagichairtham', based on a Tamil epic.
She had performed in France, Spain, US and Germany, besides at the UNESCO headquarters in Paris in October 2001 before a specially invited audience of over 500 to mark the proclamation of Koodiyattam as a world heritage art.
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