She died after a prolonged age-related illness.
Dr Pfau first visited Pakistan in 1960 and was so touched by the plight of leprosy victims that she decided to stay forever in the country to treat them.
She was 29 when landed in Karachi for the first time. She founded the Marie Adelaide Leprosy Centre in Karachi in 1962 and later set up its branches in all provinces of Pakistan, including Gilgit-Baltistan, and treated over 50,000 families.
"She was a messiah and magic healer for her patients. She played a dynamic role in removing the stigma attached to the healing of leprosy patients," said Mervyn Lobo, the CEO of Marie Adelaide centre.
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Dr Pfau was granted Pakistani citizenship in 1988. She was awarded the Hilal-e-Imtiaz - Pakistan's second highest civilian award - in 1979 and the Hilal-e-Pakistan in 1989.
She was also awarded the Staufer Medal at the German consulate Karachi in 2015.
"The entire nation is indebted to Ruth Pfau for her selfless and unmatched services for the eradication of leprosy. We are proud of her exemplary services and she will remain in our hearts as a shining symbol in times ahead," according to a statement issued by the PM office.
The funeral mass will be held on August 19 at St Patrick's Cathedral, and thereafter she will be laid to rest in the Christian Cemetery (Gora Qabristan).
In a tweet, the Inter-Services Public Relations, the media wing of the Pakistan Army, said Dr Ruth would be remembered as an "ambassador of humanity."
Dr Pfau was born in 1929 in Germany and lived through the horrors of the World War II.
She joined the Society of Daughters of the Heart of Mary and was assigned to go to India but landed in Karachi for a brief stay due to some visa problems.
Her interaction with leprosy patients in the port city motivated her to change the plan and stay rest of life in Pakistan to help the patients.
"With great concern we have got the sad massage of the death of Dr Ruth Pfau. She was a devoted Christian nun and a member of the society of Daughters of the Heart of Mary. We are losing with her an important symbol of the German Pakistan friendship. Her services will never be forgotten.