Zia, aged 80, had advanced cirrhosis of the liver, arthritis, diabetes, chest and heart problems, her doctors said.
"The BNP chairperson and former prime minister, the national leader Begum Khaleda Zia, passed away today at 6:00 am, just after the Fajr (dawn) prayer," the party confirmed in a statement.
"We pray for the forgiveness of her soul and request everyone to offer prayers for her departed soul," it added.
Zia was admitted to a private hospital on November 23 with a severe chest infection affecting her heart and lungs, doctors and senior party officials said.
Her party regained prominence after Sheikh Hasina, Bangladesh's long-serving former prime minister, was ousted in a student-led uprising in 2024.
Zia had faced corruption cases she said were politically motivated, but in January, Bangladesh's Supreme Court acquitted her in the last case against the former prime minister.
She returned to Bangladesh in May after undergoing medical treatment in the UK.
Zia was married to former president Ziaur Rahman, who was killed during a 1981 coup. She then helped build a mass democracy movement against military dictator Hussain Muhammad Ershad, who was finally ousted in 1990.
She won her first term as prime minister in 1991 and served again from 2001. Her opponent in that election and several since was Hasina.
with AP