Balachander's son Prasanna lit the funeral pyre after completion of traditional rituals.
Fans, admirers and members of the film fraternity including actor Rajinikanth and acclaimed filmmaker Bharathiraja were among those who bid a tearful adieu to the departed soul at the crematorium.
A wreath was placed on behalf of former President APJ Abdul Kalam.
Earlier, the flower decked cortege which had body of the director was brought in a procession to the Besant Nagar electric crematorium from his Warren Road residence in Mylapore.
All along the route in Mylapore, Mandaveli, Adyar and Besant Nagar people from apartment complexes and commercial high rise buildings watched the funeral procession.
Police had a tough time in regulating the crowd.
South Indian Film Artistes Association chief R Sarath Kumar, top actor Prakash Raj, comedian Vivek, film directors Parthiban, Vasanth were among those who were on the truck that carried the body of the veteran.
Earlier, at his house, unending stream of visitors including former Union Minister P Chidambaram, music composers A R Rahman, Illayaraja, senior Left leader D Pandian, actors, actresses and technicians paid homage.
The cortege in a procession arrived at the crematorium at 5 pm which left his house by 3.10 pm. The body was cremated at 5.30 pm.
The director was consigned to flames in his trademark white shirt, pant and black glasses.
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