Draped in the national flag, Lee's coffin was taken on a solemn procession through the sodden streets of the tropical city, where crowds of mourners defied the downpour to pay their last respects.
The funeral service was attended by dozens of foreign dignitaries, including former U.S. President Bill Clinton and Indian Prime Minister Narendra Modi.
"The light that has guided us all these years has been extinguished. We have lost our founding father Mr. Lee Kuan Yew, who lived and breathed Singapore all his life," Singaporean Prime Minister Lee Hsien Loong, who is one of Lee's sons, said in a eulogy.
Lee died early Monday morning at age 91, prompting an outpouring of grief and tributes from around the world. He had been admitted to the hospital with pneumonia on February 5.
Born in 1923, Lee co-founded Singapore
, a former British colony, in 1965 when it declared its independence from Malaysia. He served as its prime minister for more than three decades, shaping the once poor trading post into a wealthy financial center. He continued to play an important role in government until his final years.
'Long and full life'
After Lee's death, hundreds of thousands of people joined huge lines to pay respects to the former leader as his body lay in state at Singapore's Parliament House for several days last week.
The procession Sunday weaved past a number of notable Singapore landmarks on the way to the University Cultural Centre, where the state funeral service took place.
"Together, we came not only to mourn. Together, we celebrate Mr. Lee Kuan Yew's long and full life, and what he has achieved with us, his people," his son said in his eulogy.
Lee was also honored by a 21-gun salute and a minute of silence, as well as displays by the Singapore Air Force and the Singapore Navy.
The funeral service was to be followed by a private cremation.
World leaders in attendance
Other international figures attending the funeral included Japanese Prime Minister Shinzo Abe, Australian Prime Minister Tony Abbott, Leader of the U.K. House of Commons William Hague and former U.S. Secretary of State Henry Kissinger.
Although Lee is admired for the economic success he helped Singapore achieve, he also drew criticism for curbing media freedoms and the treatment of political opponents.
"While remembering his deeds that helped build Singapore up to what it is today, the government should also mark the passing of Lee Kuan Yew, by making a break from the politics of yesteryear that were too often marked by restrictions on basic civil and political rights," Phil Robertson, deputy director of Human Rights Watch's Asia division, said in a statement Sunday.