He was 90.
Ahmed was the former Maharashtra Minister of technical and higher education, state president of Janata Dal (Secular) and former legislator in the state Assembly for nearly three decades.
He passed away this morning at a private hospital in Nashik, they said.
Popularly known as 'Nihalbhai', he was also the first mayor of the Malegaon Municipal Corporation.
(REOPENS BES12)
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Ahmed was admitted to the hospital last night for
respiratory problems, sources added.
He was also the Leader of Opposition in the Maharashtra Legislative Assembly from 1986-1989.
His body will be buried at the 'Bara Sonapura Kabrasthan' in Malegaon at around 9 pm tonight.
Meanwhile, local politicians cutting across party lines from Nashik paid floral tributes to Ahmed.