"We all are deeply saddened to hear of the demise of veteran leader and former CM of Delhi Madan Lal Khuranaji. As a mark of respect to the departed soul, state mourning shall be observed by Delhi government for two days," Delhi Deputy Chief Minister Manish Sisodia tweeted.
Khurana died on Saturday night at his residence here. He was 83.
Delhi Lieutenant Governor Anil Baijal and Chief Minister Arvind Kejriwal also expressed condolence over the senior leader's death.
"Extremely saddened to learn about the demise of former Chief Minister of Delhi Madan Lal Khurana. He will be remembered by all for his contribution to the development of Delhi. My deepest condolences," Baijal tweeted on Sunday.
Born on October 15, 1936, Khurana served as Chief Minister from 1993 to 1996.
He resigned amid controversy in relation to the hawala scandal. Khurana also served as Parliamentary Affairs and Tourism Minister in the late Prime Minister Atal Bihari Vajpayee's government.