Demirel's coffin was placed in front of the parliament building where dignitaries including President Recep Tayyip Erdogan and Prime Minister Ahmet Davutoglu paid their respects.
Escorted by the presidential guard the coffin was then paraded through the streets of Ankara to the Kocatepe mosque for a funeral ceremony.
A moderate conservative, but overall a pragmatist, Demirel served as prime minister on repeated occasions in the 1960s and 1970s and then again one final time in the 1990s before serving as head of state from 1993 to 2000.
In all, he was prime minister of seven different governments, serving five separate stints in the post.
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He died on Wednesday of heart failure resulting from a severe respiratory tract infection, the official Anatolia news agency said.
Nicknamed "Coban Sulu" (Suleyman the Shepherd), Demirel was known for his earthy turns of phrase and folksy wisdom that showed up his provincial roots in the southern Isparta region.
He will be buried on Saturday in his native Isparta.