Santiago Cavieres, a 75-year-old lawyer, said: "I'm going to celebrate with my family the death of the tyrant. I even have a bottle of Brazilian cane alcohol we've been saving for 25 years to celebrate this day.
"I was in the National Stadium [a sports stadium used as a concentration camp in 1973] and from there they sent me to the Chacabuco concentration camp, where I was for eight months... Everyone there was tortured," he said.
Pinochet took power in a US-supported 1973 coup overthrowing Salvador Allende, the elected socialist president.
More than 3,000 people died in political violence under Pinochet's rule, many at the hands of repressive secret police. About 28,000 people were tortured in secret detention centres and hundreds of thousands of Chileans went into exile.
Despite Pinochet's human rights record, many Chileans loved him and said he saved Chile from Marxism. Supporters say his economic reforms put Chile on track to become Latin America's model economy.
More than a thousand weeping supporters gathered outside the military hospital on Sunday, singing in broken voices the national anthem and praises to their deceased general.
Adriana Malter, a grandmother and shopkeeper, outside the military hospital, said:"He made mistakes like every human being, but he did a lot for this country. This country is the way it is thanks to him."
Dozens of police stood by outside the hospital, in case of violence.
Margaret Thatcher, former British prime minister and one of Pinochet's most important allies from the 1980s, reacted through a spokesperson, who said: "Lady Thatcher was greatly saddened to hear the news of Mr Pinochet's death and sends her deep condolences to his widow and his family."
While Pinochet's Cold war anti-Communist stance won him support from Thatcher and from Ronald Reagan, the former US president, at home he sowed hatred and polarisation.
Guillermo Tellier, president of Chile's small Communist party said "he died with a dirty conscience".
The White House issued a statement expressing concern for the victims of his government and their families. Tony Fratto, a White House spokesman, said: "Augusto Pinochet's dictatorship in Chile represented one of most difficult periods in that nation's history.
"Our thoughts today are with the victims of his reign and their families. We commend the people of Chile for building a society based on freedom, the rule of law, and respect for human rights."
Pinochet's body was to be moved on Sunday evening to a military chapel for viewing,
He will be given a funeral with military honours, but will not be honoured as a former head of state, a government spokesman said on Sunday.
"It has been determined that the deceased former general shall receive the honors of a former commander in chief of the army," government spokesman Ricardo Lagos Weber said in a statement.
Some Chileans say he should be given full state honours while others would regard that as a disgrace.
Pinochet was accused of dozens of human rights violations, but a lengthy effort to bring him to trial in Chile failed as his defence lawyers successfully argued that he was too ill to face charges.
He was under house arrest, in one of the rights cases against him, for his 91st birthday in November, and at the time he issued a statement suggesting that he realised his death could be near.
"Today, close to the end of my days, I want to make clear that I hold no rancor toward anybody, that I love my country above all else," he said in a statement read by his wife.
In the statement, he accepted "political responsibility" for acts committed during his rule.