Bhat was 71 and had been suffering from illness for the past few years.
He breathed his last at his Tulsibagh official residence this morning and he was later laid to rest at his ancestral graveyard in Rajbagh locality of uptown Srinagar, the officials said.
A law graduate, Bhat joined National Conference decades ago and got elected to the Lok Sabha on the party ticket from Srinagar parliamentary constituency in 1989.
Bhat represented Amirakadal Assembly constituency of Srinagar on National Conference ticket in 1996.
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He contested the election from Amirakadal constituency on Congress ticket and retained the seat.
In 2008 Assembly polls, he filed nomination papers as independent candidate after National Conference denied him mandate from Amirakadal.
He, however, later withdrew in favour of party candidate Nasir Aslam Wani and returned to the party fold, National Conference sources said.
Prior to joining National Conference, Bhat had held various top positions of the High Court Bar Association, Srinagar.
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Meanwhile, National Conference President Farooq Abdullah and Working President Omar Abdullah have expressed profound grief and sorrow over the demise of Bhat and extended their heartfelt condolences to the bereaved family.
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Meanwhile, Chief Minister Mehbooba Mufti also condoled the demise of Bhat and expressed heartfelt condolences to the bereaved family.
Ruling Peoples Democratic Party (PDP) said the leader had throughout his life contributed towards the overall welfare of the people and the state.
A delegation of PDP, comprising Nizamuddin Bhat, Zahoor Ahmed Mir, Minister of State Zaffar Iqbal Manhas and Rafi Ahmed Mir, visited the bereaved family.