He was 62 and is survived by his wife, a son and a daughter.
Nizam's body was taken to his residence at Sutahata in Cuttack where eminent cine artists, musicians, singers and relatives paid their last respects to him.
Nizam was later laid to rest at Daragha Bazar, the family sources said.
Earlier, the private hospital where he was undergoing treatment refused to hand over his body over payment of bills, state Tourism and Culture minister Ashok Panda said.
However, the issue was resolved on the intervention of Chief Minister Naveen Patnaik, said the minister, who was among the dignitaries to pay his respects to the lyricist.
Odia film industry and Nizam's fans expressed shock over his death. "It is a big loss for Odisha," said eminent singer Prafulla Kar.
"Though Nizam was born in a Muslim family, he used to write devotional songs for Lord Jagannath. We call him present day Sala Beg," said noted film director Sanjay Nayak.
'Mu je eka pagala bhanara' and 'Hrudaya ra ahe sunyata' are some of the popular Odia songs written by Nizam.
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