The veteran writer, who was ill and had faded from public life, passed away "very, very peacefully", his son Rahul Singh, also a journalist said on his demise.
Singh was born in Hadali District Khushab, Punjab (which now lies in Pakistan), in a Sikh family. Son of Sir Sobha Singh, a civil contractor and a prominent builder of Lutyens' Delhi, Khushwant Singh lived in Sujan Singh Park built by his father where he breathed his last.
He led a very full life, Rahul said, adding, he had some breathing problems but was mentally alert till the end.
As a journalist he had edited the now defunct Illustrated Weekly of India (1979-1980) and later the Hindustan Times (1980-83). His weekly column 'With Malice Towards One and All' was very popular and was syndicated in many dailies.
He was also founder-editor of Yojana magazine (1951-1953).
Singh, an outstanding novelist and a forthright political commentator, was nominated to Rajya Sabha by the government under late Indira Gandhi. He was a Member of Parliament from 1980 to 1986.
He was awarded the Padma Bhushan in 1974 but returned the decoration in 1984 in protest against the storming of the Golden Temple in Amritsar by the Army. In 2007, he was awarded the Padma Vibhushan, the second-highest civilian award in India.
Known for his humour, Singh took lots of digs at his community. His works ranged from political commentary and contemporary satire to outstanding translations of Sikh religious texts, Urdu poetry and a number of novels.
Born in 1915 in Hadali (now in Pakistan), Singh had done his schooling at Modern School in Delhi and later studied at St Stephen's College here before moving to the Government College in Lahore. He also studied at King's College in Cambridge University.
He practiced law at the Lahore High Court for several years before joining the Ministry of External Affairs in 1947.
He had married Kawal Malik in 1939 and has son Rahul and daughter Mala. Malik had died in 2001.
Singh had worked on a classic two-volume history of the Sikhs, a number of translations and non-fiction books on a variety of subjects including nature, current affairs and Urdu poetry.
At 95, Singh had authored the novel "The Sunset Club". His autobiography, "Truth, Love and a Little Malice", was published in 2002.
His short story collection includes 'The Mark of Vishnu and Other Stories', 'A Bride for the Sahib and Other Stories', 'Black Jasmine', 'The Portrait of a Lady' and 'A Love Affair In London'.
Singh was known to have a good equation with former Prime Minister Indira Gandhi and even supported the Emergency she had clamped between 1975-1977.
Prime Minister Manmohan Singh condoled the passing away of the author, describing him as "a gifted author, candid commentator and a dear friend" who lived a truly creative life."
As news of his demise spread, tributes poured in from his fans in the social media.
"Oh no Khushwant Singh is no more. He made our lives so much richer by his literary contributions," actor Shah Rukh Khan tweeted.