Five-time prime minister Thapa, who founded the Rastriya Prajatantra Party (RPP), had been receiving treatment at Medanta Hospital in the Indian capital for the last few weeks.
The government, at a cabinet meeting on Thursday, announced a public holiday for Friday and directed all concerned to lower the national flag to half-mast at all government offices and Nepali missions abroad in Thapa's honor.The late leader's body was flown to Kathmandu on Thursday afternoon. RPP Spokesman Thakur Sharma said the body will be kept at Thapa's residence at Maligaun till Friday morning. Later, it will be placed at Dashrath Stadium for last tributes before being taken to Pashupati Aryaghat for cremation.
Thapa's demise has brought to an end a six-decade political journey.
A leader known for his ability to make decisions even at critical political junctures, Thapa proved himself relevant under the party-less Panchayat system, after the restoration of democracy in 1990 and even under the republican setup.
He became head of government three times during the Panchayat system when kings ruled the country with absolute power. Forming a pro-monarchy party (RPP), he remained active in politics after 1990 also and became prime minister twice under the multiparty democratic system. He headed different governments for altogether 11 years and stepped down for the last time in 2005.
He was eldest member of the present 601-member Constituent Assembly. As the eldest among the CA members elected in the second CA poll in November 2013, Thapa chaired the Assembly for some weeks until Subas Nembang was elected chairman.
Thapa, who headed the government under three kings -Mahendra, Birendra and Gyanendra - and worked closely with the monarchy, stood in favor of declaring the country a federal, secular, republican country even as a section of leaders from the RPP opposed the decision.
Leaders from various political parties respected him as a towering political figure who could transform himself along with the changed political context and accommodate views from diverse political forces.
Most recently in March, Thapa hosted a dinner reception for top leaders of all the major political parties at his residence at Maligaun.
Prime Minister Sushil Koirala, former prime ministers and the chiefs of other major political parties among dozens of leaders gathered at his residence at a time when the ruling and opposition camps were in a blame game.
He is also one of the leaders widely criticized for various reasons. Leaders from political parties accuse Thapa of blatantly misusing the state coffers for the victory of the Panchayat system during the referendum in 1980 to choose between a multiparty democracy and a party-less Panchayat system.
Prime Minister Koirala, in his condolence message, said the nation has lost a courageous, ambitious and determined leader who gladly embraced change and was liberal as well.
On his demise, top leaders from various political parties remembered him as a towering figure of Nepali politics.
Issuing a statement, the Nepali Congress central office said the country has lost a veteran politician.
CPN-UML Chairman KP Sharma Oli described Thapa as a dynamic leader, who could transform himself on the basis of the changed political context, and praised him for standing in favor of a republican system and other political changes.
Former prime ministers Sher Bahadur Deuba of the NC and Baburam Bhattarai of UCPN (Maoist) said they were shocked by the news of Thapa's demise.
"The country has lost a mature leader while I have lost a good friend and a trusted guardian," said Bhattarai.
Chairman of Rastriya Prajatantra Party Nepal, Kamal Thapa, remembered him as a leader who could take wise decisions even at times when the country was in crisis.
However, he was also criticized for supporting the erstwhile kings in suppressing political leaders fighting for establishing democracy.
Condolences also poured in from outside the country and from diplomatic missions as well.
President of India, Pranab Mukherjee expressed heartfelt condolences. "Sad demise of Surya Bahadur Thapa, former Prime Minister of Nepal. With his passing, Nepal has lost great leader and visionary statesman," said Mukherjee in his twitter handle.
The official twitter handle of Prime Minister of India, Narendra Modi, said "PM has expressed grief on the passing away of former Nepal PM Shri Surya Bahadur Thapa & extended condolences to Shri Thapa's family."
Likewise, the US ambassador to Nepal Peter W. Bodde wrote in his tweeter handle: "Remembering meetings over the years with the wise & selfless Surya Bahadur Thapa--condolences to Sunil Thapa, his family & the nation #Nepal"