Mr Rafsanjani, Iran's Ex-president from 1989 to 1997, suffered a heart attack
He played a pivotal role in the 1979 revolution but later in life became a counterpoint to hard-line conservatives.
Supreme Leader Ali Khamenei hailed a "companion of struggle" despite their differences, saying that the loss was "difficult and overwhelming".
"The different opinions and interpretations at time in this long period could never entirely break up the friendship" between us, Ayatollah Khamenei said.
There will be three days of national mourning.
Mr Rafsanjani was admitted to the Shohadaa Hospital in Tehran on Sunday, where doctors tried unsuccessfully for an hour to save him, media said.
A TV broadcaster broke into programmers to bring the news, saying Mr Rafsanjani "after a life full of restless efforts in the path of Islam and revolution, had departed for lofty heaven".
Mr Rafsanjani had warm relations with President Hassan Rouhani, who was seen at the hospital shortly before the death was announced. A crowd reportedly gathered at the hospital later to mourn.
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