The 86-year-old Daim served as finance minister from 1984 to 1991 and from 1999 to 2001 under former premier Mahathir Mohamad.
His lawyer, Gurdial Singh Nijar, confirmed Daim's passing to Reuters, and said the funeral would be held on Wednesday.
"In the past few weeks, he was in ICU (intensive care unit) after he had a stroke," Singh Nijar said, but added that he did not know the cause of death.
Earlier this year, Daim, an ally of veteran leader Mahathir, was charged with failing to disclose assets under an anti-corruption law in one of the highest-profile graft cases involving prominent figures. Daim had pleaded not guilty.
