Niyazov had ruled the natural gas rich country for more than two decades and in the post-Soviet period built his personality cult and suppressed all political opposition.
He had declared the neutrality of his country and had downgraded Ashgabat's participation in the Commonwealth of Independent States (CIS), a loose confederation of former Soviet republics.
Niazov, a Communist leader of the region since 1985, when it was part of the Soviet Union, retained control of Turkmenistan after the breakup of the Soviet Union in 1991.
He had renamed the months and days of the week after him and his family, and statues --many made of gold of him were erected throughout the nation.
His brutal suppression of all forms of dissent was criticized internationally, though that did not deter nations, including India, from negotiating with him for massive energy contracts.
Niazov's book, the Rukhnama (Book of the Soul) was compulsory reading in schools, where children pledge allegiance to him every morning.
The funeral --to be overseen by a special commission led by Deputy Prime Minister Kurbanguly Berdymukhamedov-- is expected on Sunday.
However, it is unclear whether Berdymukhamedov will automatically succeed the eccentric leader.
(With agency reports)