Eminent novelist and short storyteller Dalip Kaur Tiwana died in a private hospital near here on Friday, her family said.
The 84-year-old Padma Shri recipient and Sahitya Akademi awardee was admitted to the intensive care unit of the hospital with acute congestion in the lungs.
She is survived by her husband Bhupinder Singh and son Simranjit Singh.
The cremation will take place in Patiala on Saturday.
In 2015, Tiwana had returned the Padma Shri to express solidarity with writers protesting against "suppression of freedom of expression and communal attacks".
Patiala MP and former Union minister Preneet Kaur tweeted: "Saddened to hear that leading Punjabi novelist and writer of books like Agni Prikhya and Eho Hamara Jiwna, Padam Shri Dalip Kaur Tiwana is no more."
"My thoughts and condolences with the family in this difficult time. She has left behind a gaping hole in the literary world of Punjab," she added.
Tiwana had penned 40 novels, seven collections of short stories, two autobiographies and a literary biography.
On January 16, state Rural Development and Panchayats Minister Tript Rajinder Singh Bajwa met Tiwana's family in the hospital and assured them that the state would provide financial aid for Tiwana's treatment.