The Prime Minister's Office said in a statement posted on its website that Lee "passed away peacefully" at the hospital at 3:18 a.m. Monday.
The country's first and longest-serving prime minister, Lee guided Singapore through a traumatic split with Malaysia in 1965 and helped transform what was then a sleepy port city into a global trade and finance centre.
Although he could have remained in office for much longer, he stepped aside and handed over leadership of the ruling party, and the country, to a younger generation in 1990. Still, he remained an influential behind-the-scenes figure for many more years until his health deteriorated.
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Prime Minister Stephen Harper said in a statement he was saddened to learn of Lee's death, passing on condolences on behalf of Canadians.
"He was a highly respected and accomplished leader who transformed Singapore from a developing country into a global leader in finance, shipping, education and technology. … His memory will live on in the stability and prosperity of the peaceful and dynamic Southeast Asian nation to which he contributed so much of his life," said Harper.
President Barack Obama called Lee a "visionary" and "true giant of history."
"Lee's views and insights on Asian dynamics and economic management were respected by many around the world," Obama said in a statement. "No small number of this and past generations of world leaders have sought his advice on governance and development. "
'I had to do some nasty things'
UN Secretary-General Ban Ki-moon said he was "deeply saddened" by Lee's death. He noted that Singapore is marking its 50th anniversary of independence this year, and "its founding father will be remembered as one of the most inspiring Asian leaders," according to a statement released by Ban's spokesman.Ban said Lee helped Singapore "transition from a developing country to one of the most developed in the world, transforming it into a thriving international business hub."
Lee's legacy includes an efficient government with little corruption, low tax rates to attract foreign investment, excellent schools and clean and safe streets, all of which have helped Singapore rank consistently near the top of surveys of the most livable cities for expatriates.
Lee insisted that strict limits on free speech and public protest were necessary to maintain stability in a multiethnic and multi-religious country that witnessed race riots in the 1960s. That stability, he added, was needed to enable growth and raise living standards in a country with few natural resources.
"I had to do some nasty things, locking fellows up without trial," Lee said in an interview with The New York Times published in September 2010. "I'm not saying everything I did was right. But everything I did was for an honourable purpose."
Japanese occupation helped shape approach
Lee, whose People's Action Party has ruled Singapore since 1959, remained a powerful adviser with Cabinet minister status after stepping down as prime minister, and many Singaporeans, particularly older ones, viewed him as a wise, if strict, father figure.Lee gave up his Cabinet minister post and resigned from the executive committee of the People's Action Party after 2011 parliamentary elections in which the ruling party won its lowest overall vote percentage since independence.
One of his sons, Lee Hsien Loong, is Singapore's current prime minister. He also is survived by another son, Lee Hsien Yang, and a daughter, neurologist Lee Wei Ling. His wife of more than 60 years, Kwa Geok Choo, died in October 2010.
"The Japanese demanded total obedience, and got it from nearly all," he wrote in his memoirs. "My appreciation of governments, my understanding of power as the vehicle for revolutionary change, would not have been gained without this experience."
'Never mind what the people think'
After completing his studies at Singapore's Raffles College, Lee went to England to study law at Cambridge University. There, he married Kwa, a fellow student, in 1947. He returned to Singapore in 1950 and started the law firm Lee & Lee with his wife in 1955.In 1954, Lee helped found the People's Action Party in alliance with communist trade unionists — whom he would later break with — and he became Singapore's first prime minister in 1959 when Britain granted it self-governance in all matters except defence and foreign affairs.
He then turned to governing his tiny island state, imposing strict policies that some saw as micromanaging the daily lives of Singaporeans. Lee outlawed the sale of chewing gum, promoted English and Mandarin while banning other Chinese dialects from public schools, radio and TV. He also enforced ethnic integration by controlling the makeup of public apartment buildings, where 80 per cent of the population lives.
"I say without the slightest remorse, that we wouldn't be here, we would not have made economic progress, if we had not intervened on very personal matters — who your neighbour is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think," Lee said in 1987.
Lee also cracked down on organized crime and imposed harsh penalties for minor infractions, a policy that has helped Singapore maintain one of the world's lowest violent crime rates.
Drug couriers face mandatory hanging, vandals are sometimes caned — such as American teenager Michael Fay in 1994 despite a plea for leniency from President Bill Clinton — and litterbugs must pay a hefty fine.
Lee stayed active in his later years, commenting on domestic and international affairs and representing Singapore on frequent trips abroad.
The government declared seven days of national mourning and ordered flags to fly at half-mast on state buildings