The three-time first lady was diagnosed with cancer in August 2017, and suffered a heart attack on 14 June.
According to interior ministry officials, Nawaz, Maryam and her husband will be granted parole for Kulsoom's funeral prayers till her burial, after a request is made by the family.
Begum Kulsoom, 68, had been placed on life support earlier today as her health began deteriorating, sources at London's Harley Street Clinic had told GeoNews.
She underwent multiple surgeries and at least five chemotherapy sessions, but did not recover.
Earlier this year, the senior politician had accused the PML-N leadership of politicising Kulsoom Nawaz's illness, saying the hospital where she received treatment was owned by the Sharif family.
Nawaz, Maryam have been serving time in Adiala Jail, Rawalpindi after an accountability court ruled that they had assets beyond known income.
The Prime Minister has directed Pakistani High Commission in London to assist in provision of all necessary facilities to the heirs of the deceased. Her daughter Maryam ran her election campaign in her absence.
When Nawaz and Maryam Sharif left London for Pakistan in July, they knew they faced lengthy jail terms and would likely not see Ms Nawaz again.
Born into a Kashmiri family in Pakistan's Punjab, Kulsoom graduated from the Forman Christian College University.
She would not take to politics again until past year, after her husband - now prime minister again - was disqualified by the Supreme Court from holding a public office. She was under treatment at London's Harley Street Clinic since July a year ago.
Begum Kulsoom led defiant, lonely protests against the Musharraf regime to get her husband freed from prison. Maryam had said in the past that her mother "dauntlessly challenged the usurper (Pervez Musharraf) when a lot of men backed out".
Leaders of political parties and Gen. Qamar Javed Bajwa, the chief of army staff, extended their condolences to the bereaved family. "May Allah bless the departed soul eternal peace at Heaven-Amen", COAS", he tweeted.