He was 87.
Zargar breathed his last at his Jammu residence this morning, a PDP spokesman said, adding that he had been ailing for some time.
Zargar was a member of the constituent Assembly of Jammu and Kashmir in 1951 and served as Agriculture Minister in the Mir Qasim government in 1972.
Later, he held the same portfolio in the PDP-Congress coalition government from 2002 to 2008.
His body will be brought to the Valley later in the afternoon and taken to his native Manzgam village in south Kashmir's Kulgam district for last rites.
He is survived by his wife, four sons and three daughters.