The godman, who has several followers in India and abroad, was 86. The end came at around 7:40 AM due to cardio-respiratory failure, Safaya said in the bulletin.
The baba's body will be shifted to Prasanthi Nilayam, 6 km from the hospital and kept for darshan for two days at a central hall there.
An official communication was issued at around 10 am as the authorities rushed more forces to this small pilgrim town to deal with any eventuality.
Shops and establishments have been ordered to close down in Puttaparthi. AP Chief Minister Kirankumar Reddy and Governor Narasimhan have rushed to Puttparthi.
Doctors at Sathya Sai Super Speciality Hospital, where Sathya Sai Baba was undergoing treatment for the past 26 days, said the Guru passed away due to multiple organ failure. His his vital organs, including heart, liver, kidneys and lungs, were not functioning properly for the past few days.
As the 85-year-old spiritual leader was battling for life, represetnatives of the Andhra Pradesh government Saturday held a meeting with the doctors attending on him and members of Sathya Sai Central Trust.
Minister for Major Industries J. Geeta Reddy told reporters that her visit was aimed at ensuring coordination among doctors, the government and the trust.
She assured that all the required assistance would be rendered by the government.