Lagoo, who came to represent the antithesis of the mournful white sari-clad mother of Hindi cinema through her roles, died of a cardiac arrest in the early hours of the morning at the Kokilaben Dhirubhai Ambani Hospital.
She was admitted to the hospital late last night after she complained of chest pain, the hospital's Executive Director Ram Narain told PTI.
She is survived by her daughter Mrunmayee, who is also a theatre and film actress as well as a theatre director.
"She was perfectly fine and had no health issues... So it is really shocking for all of us that she is no more with us."
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Tributes poured in as the news of her sudden death spread.
Prime Minister Narendra Modi remembered Lagoo as a versatile actor who left a big impact in the film and TV world. "Her demise is saddening. My deepest condolences," he tweeted.
She was just 30 when she came to the limelight as Juhi Chawla's mother in Mansoor Khan's hit film "Qayamat Se Qayamat Tak".
It led to her being typecast as a mother but Lagoo's subsequent roles marked a distinct departure from the sad mother trope, represented best perhaps by Nirupa Roy that Hindi viewers were so familiar with.
The prolific actress soon became synonymous as the affectionate and genial mother, sometimes to actors who were just a few years younger than her.
From Salman Khan and Shah Rukh Khan to Govinda and Madhuri Dixit, Lagoo played mother to all the top actors and actresses of the Hindi film industry.
On television, Lagoo was popular for playing spirited characters like Kokila (Koki) in "Shrimaan Shrimati" and Devki Verma in "Tu Tu Main Main".
Her prominent cinema roles include "Saajan", "Vaastav, "Kuch Kuch Hota Hai", "Hum Saath-Saath Hain", "Deewana Mastana", "Yes Boss" and "Main Prem Ki Diwani Hoon".
She was last seen on the television show "Naamkaran", which aired on Star Plus.
Celebrities like Amitabh Bachchan, Karan Johar, Priyanka Chopra, Rishi Kapoor and Mahesh Bhatt expressed their shock.
"This is truly sad news... She was warm, gracious and an exceptional actor... I had the privilege of directing her....#RIPReemaLagoo," wrote Johar, who directed Lagoo in "Kuch Kuch Hota Hai".
"RIP #ReemaLagoo such a loss to art and cinema. You are and will always be our favourite screen mom. My condolences to the family," said Chopra.
Kapoor, who collaborated with Lagoo in "Prem Granth" and "Henna", tweeted, "RIP. Worked in quite a few films. Reema Lagoo. Good friend. Heartfelt condolences."
"But that didn't happen. I am still grappling with the news of her sudden death," he added.