He was 82, and is survived by son and daughter. He had been suffering from Parkinson's disease for the last two years, family sources said.
Inspired by the ideals and principles of Dravidan Rationalist leader Periyar E V Ramaswamy, Shanmugam entered politics during his student days and earned the distinction of becoming the first Municipal chairman of Tiruvannamalai at the age of 22 years.
He was elected to the State Assembly from Tiruvannamalai constituency when the Dravida Munnethra Kazhagam entered electoral politics for the first time in 1957.
He served in the DMK ministry headed by M Karunanidhi from 1969 to 1975 holding various portfolios like PWD, local administration and revenue.
Shanmugam hit the headlines when he won the fiercely fought 1963 by-election in Tiruvannamalai defeating Congress' Annamalai Pillai who was backed by the late Chief Minister Kamaraj.
He joined the All India Anna Dravida Munnethra Kazhagam after MGR founded the party and served in his ministry as Food, Labour and Health Minister till 1988.
After MGR's death, he was briefly in the AIADMK headed by Miss Jayalalithaa. He later rejoined the DMK and then quit active politics.
Shanmugam also served as the general secretary of the AIADMK in 1980 when MGR was the party president.
Chief Minister M Karunanidhi, TNCC President M Krishnasamy, Tamil Nadu Food Minister E V Velu and former minister K Pichandi were among those who paid last respects to the leader at his residence in Thiruvanmayur.
The body has been taken to Tiruvannamalai and will be cremated later on Thursday evening.
