Former chief ministers of the state Omar Abdullah and Ghulam Nabi Azad were among those who attended the funeral prayers which were led by Sayeed's trusted aide, Education Minister Naeem Akhtar.
Sayeed was given a 21-gun salute and a police band played the ceremonial Last Post.
The mortal remains of Sayeed reached his official residence on Gupkar Road in Srinagar amid sloganeering by supporters and workers of the Peoples Democratic Party (PDP), which he founded in 1999.
The coffin, in a decked up police vehicle, was later taken in the form of a procession of vehicles to the ancestral town of Bijbehara.
Omar, Azad and Sayeed's son Mufti Tassaduq carried his coffin on their shoulders before it was laid to rest.
Close relatives and senior leaders were among those who had a final glimpse of Sayeed's body before it was given a customary ablution as per Islamic rites necessary before burial.
The 'Namaaz-e-Janazah' (funeral prayers) of the departed leader was offered in the Sher-e-Kashmir Cricket Stadium at Sonawar in Srinagar, in which thousands of mourners took part.
Union Home Minister Rajnath Singh and state Governor N N Vohra were among those who visited the bereaved family at its Gupkar residence to offer condolences.
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