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He was 89 and is survived by his wife, a son and two daughters.
Chatterjee was suffering from a kidney-related ailment and was admitted to the hospital in a critical condition on Tuesday last week.
“He suffered a multiple organ failure and had stopped responding to treatment since late last night. He passed away this morning at around 8.15 am,” the official told PTI.
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He was under treatment for the past 40 days and was discharged from the hospital just for three days after his health showed signs of improvement.
However, his condition deteriorated last Tuesday and he had to be hospitalised again, the official said.
A 10-time Lok Sabha MP, Chatterjee was a central committee member of the CPI(M), which he had joined in 1968.
He was the Speaker of the Lok Sabha from 2004 to 2009.
The veteran leader was, however, expelled from the CPI(M) in 2008 for refusing to resign as Speaker after his party withdrew support to the UPA-I government.