Lee, 91, who is on a ventilator in the intensive care unit of Singapore General Hospital, had an infection and was being treated with antibiotics for pneumonia.
"Mr Lee Kuan Yew remains critically ill in the ICU and has deteriorated further," a statement from the office of his son, Prime Minister Lee Hsien Loong, said.
On Tuesday, the PMO office had said that Lee's ‘condition has worsened due to an infection. He is on antibiotics. The doctors are closely monitoring his condition.’
Born in 1923, he co-founded the city state in 1965 when it declared its independence from Malaysia. Lee was the first prime minister of independent Singapore and led the government for three decades till 1990.
The elder Lee has been credited with Singapore's remarkable transformation from a colonial trading post to a prosperous financial center.