The 61-year-old human rights activist died due to multiple organ failure following a battle with liver cancer on Thursday.
Family members and friends of Liu bade farewell to him at a private ceremony in northeast China's Shenyang city, an official told a media briefing in the city.
Liu's body was cremated in accordance with the will of his family members and local customs, state-run Xinhua news agency reported.
"The cremation of Liu's body on Saturday accords with local customs and respects relatives' wishes," Zhang Qingyang, spokesperson for Shenyang's information office, said.
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Liu's relatives, including his wife and brother Liu Xiaoguang, decided to cremate the remains and hold a simple funeral after consultation, the report said.
An official said Liu's body had been cremated, and that plans for the ashes would be finalised later.
The Chinese government, which had long banned Liu's work and even his name, continues to censor the story of his death, deleting social media posts mourning him and blocking online searches containing variations of his name and famed quotes.
The death of Liu, who was sentenced in 2009 for 11 years on the charges of sedition and incarcerated since then has brought the focus on the future of his activist wife Liu Xia, who has also been confined to house detention.
Liu Xia, who was also an artist, poet and a long-time associate of Liu in his uncompromising fight for democracy in China, was allowed to be with him after he was granted medical parole last month.
After Liu's death pressure was mounted by the international community on China to allow Liu Xia to travel abroad to receive the Noble Prize awarded in absentia to her husband in 2010. It was symbolically presented to an empty chair.
"Liu Xia is free so far, and we want her to avoid trouble because she was in grief after losing a relative," Zhang was quoted as saying.
According to north Chinese customs, the remains of the deceased should be cremated and a funeral held within three days after his or her passing away.
"The remains of Liu was surrounded by plain coloured petals, with wreathes laying around his body at a funeral parlor in southern Shenyang," the Xinhua report said.
Yesterday, while replying to a barrage of questions on Liu and Liu Xia, Chinese Foreign Ministry spokesman Geng Shuang told a media briefing here that no "prejudgements" need to be made about Liu Xia's future.
Asked whether China would permit Liu Xia to visit Norway to receive the Noble Peace Prize, Geng said, "Let's not make any prejudgements here," without elaborating.
Liu's death led to international criticism of China's handling of the issue. The leader of the Norwegian Nobel committee Berit Reiss-Andersen said the Chinese government bore a "heavy responsibility" for Liu's death.
Yesterday, Geng also refuted criticism of the treatment meted out to Liu, saying that awarding the Nobel Peace Prize to him amounted to "blasphemy".
He said China lodged protests with several countries, including the US, for making "irresponsible statements" on the death of the prominent dissident.
"Liu is a prisoner who was sentenced to imprisonment in accordance with Chinese law...Conferring the prize to such a person goes against the purposes of this award. It's a blasphemy of the peace prize," Geng said.