The Foreign Office also issued an apology note.
"We are withdrawing the press release which was based on wrong information passed to this office. Inconvenience is regretted," said a statement from the Foreign Office.
Edhi, who founded the Edhi Foundation decades ago, runs one of the biggest fleet of ambulances, and dozens of clinics and orphanages in the country.
The 88-year-old enjoys bipartisan support and commands huge respect.
"Today, with the sad demise of legendary philanthropist Maulana Abdul Sattar Edhi, everyone in Pakistan, Pakistanis abroad and millions of others, are in mourning. The iconic Edhi saheb was a soul who spent his whole life engaged in the noble cause of serving humanity. He lived for others," Aziz had been quoted as saying in the now-withdrawn statement.
"We are deeply saddened to lose an Ambassador of Pakistan, whose work in Pakistan and abroad projected the country's true image and was a matter of great pride for all of us... He will be remembered as we remain indebted to him," the statement had said.
Earlier, Faisal Edhi denied reports of his father's death. His father is under treatment at a hospital in Karachi for kidney failure. The philanthropist has refused offers by organisations and individuals to go abroad for treatment.
Faisal said his father was feeling better and that he was taken to hospital for routine dialysis.
The Edhi Foundation was appreciated by Indian government for hosting Geeta, the deaf-mute Indian woman who accidentally crossed the border over a decade ago.
She was repatriated to India after several years of living at one of Edhi Foundation's orphanages in Karachi.
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