Born and raised in Darjeeling, Gurung, 78, composed more than a 1,000 songs including many era-defining numbers during his long career spanning four decades. He was suffering from diabetes and Parkinson's disease.
His last rites were attended by Deputy Prime Minister and Defence Minister Bhim Rawal, who reached Pashupatinath temple and draped the national flag over Gurung's body.
A contingent of the Nepal Army offered a final salute.
Gurung's body was kept on the premises of Academy Hall in Kamladi before taking it to Pashupati temple premises for cremation.
Gurung breathed his last at around 2:37 this morning at the Grande International Hospital, in Dhapasi, hospital staff said in a statement.
Gurung is the composer of Nepali national anthem 'Sayaun Thunga Fulka Hami' and served the musical sector for more than four decades after shifting to Nepal in 1969 at the invitation of King Mahendra to lead the music department at the Nepal Academy of Arts and Literature.
His last rites were performed following both Hindu and Buddhist traditions.
He is survived by his wife, three sons and a daughter.
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