She was 85 and is survived by two sons.
The actress was admitted to the hospital on January 11 after she complained of breathing problems.
A veteran of about 500 films in Tamil, Telugu and Kannada, she began her career as a theatre artist when she was just nine years old and rose to fame through the years,rubbing shoulders with then Telegu stars N T Rama Rao and Nageswara Rao and Tamil cinema's icons M G Ramachandran, Sivaji Ganesan and Gemini Ganesan.
Anjali Devi is remembered for several roles in many Tamil films including MGR starrer "Marmayogi" and DMK founder leader C N Annadurai''s "Sorgavasal."
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She was also a successful film maker with her production house "Anjali Pictures" bringing out many successful movies, including Tamil super hit movie "Aduthaveetu Penn (1960)."
Veteran film actor P S Sachu told PTI it was Anjali Devi who spotted the talent of actor Shivaji Ganesan and cast him for her movie 'Poongothai' even before his debut movie Parasakthi.
Anjali Devi settled down in Chennai in the late 1940s and served as the first woman president (1959) of the South India Film Artiste's Association, Satchu said.