The deceased writer's namaj-e-janaza was held in Lalmatia after Isha prayers.
Earlier, the body of Mushtaq was handed over to his family at 12:30pm following completion of an autopsy.
The writer was arrested last May in a case filed under the Digital Security Act and charged with spreading disinformation against the government on social media.
He suffered a heart attack inside his cell at the high-security Kashimpur prison on Thursday evening, it was learnt.
Mushtaq was transported to Shaheed Tajuddin Medical College Hospital, but declared dead on arrival, Senior Jail Superintendent Md Gias Uddin said.
"No apparent injury marks or other symptoms were found on his body during the autopsy. However, the cause of his death can be confirmed after conducting detailed examinations," Dr Safi Mohaimen, head of the forensic department of Tajuddin Medical College, said.
Syed Bayezid, sub-inspector of Sadar police station under Gazipur Metropolitan Police, said, "Sores were found on his right hand and back. The wounds may have occurred when his body was transported to the hospital in the ambulance. However, it can be confirmed after receiving the autopsy report."
An unnatural death case has been filed with Gazipur Metropolitan Police's Sadar Police Station over Mushtaq's death in custody, Bayezid added.
Mushtaq's brother Dr Nafisur Rahman, who was waiting at the hospital morgue, stated: "I saw the body myself and did not notice anything unusual. An autopsy has been completed. What else can I say without having the autopsy report?"
The 53-year-old writer, who published the book "Kumir Chaasher Diary" under the pen name Michael Kumir Thakur, was picked up by Rapid Action Battalion (RAB) from his Lalmatia home on May 2, allegedly for posts critical of the government's handling of the Covid-19 pandemic.
On August 20, he was shifted to the Kashimpur prison, Gias Uddin said.
Calls for Mushtaq's release were widespread and sustained throughout his time in prison. Soon after his arrest, more than 300 dignitaries in Bangladesh issued a joint statement demanding his release, alongside cartoonist Ahmed Kishore.
However, his bail applications were turned down on at least four occasions.
Amnesty International reiterated the demand in a statement as recently as January, saying the duo (Kishore and Mushtaq) had been arrested "solely for the peaceful exercise of their right to freedom of expression."
Mushtaq's death triggers protest
Meanwhile, hundreds of students, teachers, and civil society members offered a ghaibana namaz-e-janaza (funeral prayers in absentia) for writer Mushtaq on Friday in front of the National Museum in Shahbagh.
However, police baton-charged the left-leaning organisation members who were demonstrating at TSC of Dhaka University this evening, over the death of Mushtaq.
The incident took place when the protesters brought out a torchlight procession in the area around 7pm.
Police obstructed them and detained some of the protesters from the spot, leading to a clash between the two sides.
At one stage, police fired teargas, forcing the protesters to take up positions in front of the central mosque of Dhaka University. At least 20 protesters were reportedly injured in the clash.
OECD envoys appalled by Mushtaq's death in custody
Thirteen Ambassadors and High Commissioners stationed in Dhaka on Friday urged the government of Bangladesh to conduct a "swift, transparent, and independent inquiry" into the full circumstances of writer Mushtaq's death in police custody.
The diplomats of the Organisation for Economic Co-operation and Development (OECD) member countries with missions in Bangladesh made the call in a joint statement expressing their grave concerns over the death.
"The undersigned heads of mission in Dhaka express our grave concern about the death in custody of Mushtaq Ahmed on 25 February 2021," reads the joint statement.
"We understand that he had been denied bail on several occasions and that concerns had been raised about his treatment while he was imprisoned," they said.
Also, the diplomats expressed their sincere condolences to his family and friends.
"We will continue to engage with the government of Bangladesh on our governments' wider concerns about the provisions and implementation of the Digital Security Act, as well as questions about its compatibility with Bangladesh's obligations under international human rights laws and standards," they said.
Digital Security Act
The Digital Security Act 2018 includes a jail sentence of up to 14 years for any propaganda or campaign against Bangladesh's Liberation War, Father of the Nation Bangabandhu Sheikh Mujibur Rahman, and the national anthem or flag.
A person could be jailed for up to 10 years for destroying communal harmony or creating unrest or disorder, the act also says.
