She was 66 and is survived by her actor husband Bal Dhuri and son.
Gadkar, who suffered a fall at her residence last week, was bedridden and breathed her last at around 0300 hrs, family sources said.
The funeral took place at the Shivaji Park crematorium this afternoon. Colleagues, fans and admirers of the veteran actress made a beeline to her Haji Ali residence and the crematorium to pay their last respects.
Noted actress Sulochana and veteran actor Nilu Phule were prominent among those who paid homage to the departed soul.
A pall of gloom descended on the Marathi film industry with the passing away of the actress. Paying rich tributes to her, prominent personalities said she was a versatile actress with a mixture of good looks, acting and dancing skills.
Apart from several state awards, she was also honoured with national awards for her performances.
Gadkar made her debut on Marathi silver screen in 1955 as a group dancer in V Shantaram's 'Jhanak Jhanak Payal Baje' with leading lady Sandhya.
With her talent, dancing skills and beauty, there was no looking back for Gadkar as she ruled the Marathi film industry in the 60s decade.
'Aaliya Bhogasi', 'Gath Padli Thaka Thaka', 'Sangtye Aika', 'Avghachi Sansar', 'Mohityanchi Manjula', 'Saadhi Mansa', 'Manini' are some of her celebrated movies.
She has also won national award for her films 'Manini', 'Vaijantha', 'Sawal Mazha Aika', 'Saadhi Mansa'.
She turned to direction with 'Saasar Maher' and 'Ashi Asavi Saasu'.
Her autobiography 'Ashi Mi Jayshri' was released some years ago. Her memorable role on national television was of 'Kausalya', Lord Ram's mother in Ramanand Sagar's tele epic 'Ramayan' in the 80s.
Gadkar was born on February 21, 1942 in Karwar district of Karnataka.
After 'Jhanak Jhanak Payal Baje', she had the opportunity to display her dancing skills in a Marathi movie 'Dista Tasa Nasta' featuring noted actor Raja Gosavi.
Later, she was paired opposite Gosavi in films like 'Aliya Bhogasi', 'Utavala Navra', 'Yala Jeevan Aise Nav', 'Avghachi Sansar' and 'Paishacha Paus', catapulting her popularity to newer heights.
Her major role as a lead actress started with 'Aliya Bhogasi' and Bhalji Pendharkar's 'Gatha Padli Thaka Thaka'. Her success as a lead actress in films with rural themes with a background of folk dance "tamasha", is unparalleled in the history of Marathi cinema.
'Sangtey Aika' (1959) ran for 132 weeks in a theatre. Her dance number 'Bugdi Majhi Sandli Ga Jata Sataryala' was a huge rage during that time and is still remembered.
She was paired opposite several top heroes of the 60s and 70s including late Suryakant and Arun Sarnaik.
Her films with Suryakant were 'Pancharti', 'Rangpanchami', 'Vaijanta'. With Sarnaik, she featured in popular films like 'Sawal Majha Aika', 'Ek Gao Bara Bhanagadi', 'Gangaulan'.
During the making of 'Manini', several industry bigwigs thought Gadkar, who always featured in 'tamasha films' with rural background will not be able to do justice to the role in Manini opposite veteran actor Chandrakant Gokhale.
She silenced her critics and also bagged a national award for her performance. Her stint in Hindi films was brief. She got to act opposite Ashok Kumar in a film called 'Private Secretary'. Her other films included 'Madari','Tulsi' 'Vivah', 'Bajrang Bali' and 'Saranga'.