ISNA said Tabandeh had passed away in the capital''s Mehr hospital, where he had been admitted on October 31.
It said the cause of death was "old age" and that his body would be flown to his hometown of Bidokht, in eastern Iran, for a funeral on Wednesday.
Tabandeh, also known as Majzub Ali Shah, was the leader of the Nematollahi order which is based in the northeastern province of Khorasan but has followers all over Iran.
A student of French literature and law, he obtained a doctorate in Paris in the 1950s before returning to Iran.
He was arrested multiple times over the years, and followers of his order also known as the Gonabadi dervishes repeatedly clashed with militias and security forces.
On March 5, 2017 he published a video claiming to be under house arrest.
The Gonabadis accuse the Iranian state of frequent harassment and discrimination.
In February 2018, at least five security personnel were killed and more than 300 people arrested during protests by the Gonabadis in northern Tehran.
At the time, the protests were reportedly linked to the arrest of members of the sect and police efforts to establish security checkpoints near Tabandeh''s home.
Sufi worship is allowed in Iran but the practice is frowned upon by many conservative clerics who regard it as an affront to Islam. (AFP) IND