"Shahabuddin, former President of All India Muslim Majlise Mushawarat left for heavenly abode this morning at 6.22 am," said close associate Navaid Hamid, who is currently heads the organisation.
Mr Shahabuddin, who is survived by his wife and four daughters, was buried at Panjpeeran cemetry in Nizamuddin with a large number of prominent Muslim figures in attendance.
Born in 1935 in Ranchi, now in Jharkhand, he joined the IFS in 1958 but took premature retirement in the 1970s to delve into politics.
As a diplomat, he lobbied for the creation of Bangladesh and rallied support in Latin America - where he was posted at that time - for Indian intervention in the affair.
Although considered to be in the good books of the then Prime Minister Indira Gandhi, he was one of the few diplomats who were openly anti-Emergency.
Within eight months of relinquishing service, Mr Shahabuddin was elected to the Lok Sabha in 1979 from Kishanganj in Bihar,a constituency that sent him to Lok Sabha multiple times.
Vice President Hamid Ansari, who was also an IFS officer, condoled his death.
In a message, Mr Ansari said, "Syed Shahabuddin was a man of deep convictions, he pursued issues that were dear to him with great tenacity and determination.
"I am deeply saddened to learn of the demise of renowned political leader, scholar, diplomat and former parliamentarian Shahabuddin," Mr Ansari said, adding that passing away is a personal loss as Shahabuddin was his friend.
Manipur Governor Najma Heptulla, AIMIM president Asaduddin Owaisi and other leaders also condoled the death.
"My condolence to the family of Syed Shahabuddin Saheb IFS and Ex-MP. May his soul rest in peace," Ms Heptulla said in a tweet.
Mr Owaisi said that Shahabuddin's death is great loss to nation and minorities in particular. He added that it will take many years to see a politician and intellectual like him.