She died after a prolonged age-related illness.
Dr Pfau first visited Pakistan in 1960 and was so touched by the plight of leprosy victims that she decided to stay forever in the country to treat them.
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Due to her tireless efforts, the World Health Organisation in 1996 declared Pakistan one of the first countries in Asia to be free of leprosy.
She was born in 1929 in Germany and lived through the horrors of the World War II.
Pfau joined the Society of Daughters of the Heart of Mary and was assigned to go to India but landed in Karachi for a brief stay due to some visa problems.
Her interaction with leprosy patients in the port city motivated her to change the plan and stay rest of life in Pakistan to help the patients.
She was 29 when landed in Karachi for the first time. She was awarded the Hilal-e-Imtiaz - Pakistan's second highest civilian award - in 1979, the Hilal-e-Pakistan in 1989.
She was also awarded the Staufer Medal at the German consulate Karachi in 2015.
Prime Minister Shahid Khaqan Abbasi said Pfau "may have been born in Germany, but her heart was always in Pakistan".
"Dr Ruth came to Pakistan at the dawn of a young nation, looking to make lives better for those afflicted by disease, and in doing so, found herself a home," Abbasi said, praising her courage and services.
The funeral mass will be held on August 19 at St Patrick's Cathedral, and thereafter will be laid to rest in the Christian Cemetery (Gora Qabristan).
German embassy said in a statement that German ambassador Martin Kobler expressed his heartfelt condolences and sympathies to the representative of the Maria Adelaide Leprosy Centre.
"With great concern we have got the sad massage of the death of Dr Ruth Pfau. She was a devoted Christian nun and a member of the society of Daughters of the Heart of Mary. We are losing with her an important symbol of the German Pakistan friendship. Her services will never be forgotten.
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