"It is with great sadness that we announce the passing of Mrs Madhu Jyotsna Akhouri, our beloved mother and grandmother, freedom fighter, social activist, MLA, amongst other things."
"She was an amazing woman who lived a full life, filled with purpose and love," Priyanka said in a statement.
"She left us in her sleep, surrounded by her family and loved ones," she added.
The 33-year-old Bajirao Mastani actress said her grandmother will always be in her heart. "Those we love don't go away, they walk beside us everyday," said Priyanka.
The Exotic singer is back in Mumbai after finishing the schedule of her first Hollywood film Baywatch in the US.
Reportedly, Priyanka has taken some time off from her work to be with her family.
She is expected to be in city for few weeks before heading off to the US again to start work on her next Hollywood project and the second season of her American show Quantico.