Berlin's Tagesspiegel newspaper reported that the 83-year-old died in a hospital in the German capital on Monday.
Gerlach was the Chairman of the State Council from December 1989 to April 1990 as the German Democratic Republic (GDR) prepared for unification, making him the communist country's last effective head of state.
Gerlach served in the People's Chamber, the GDR's legislature, from 1949 to 1990. He also had a long-term leadership role on the State Council, the political body which steered the country.
Gerlach was also chairman of the Liberal Democratic Party of Germany (LDPD), a political party that became affiliated with the ruling Socialist Unity Party (SED), and which advocated comparatively liberal politics.
As it became clear that communism was facing its impending death in 1989, Gerlach began speaking out against the ruling party and the oppression of anti-communist activists. This made him controversial for hard-liners, but popular among ordinary East Germans.
Once the Berlin Wall fell, Gerlach was elected head of state, but his position was discontinued as unification neared.
In reunified Germany, Gerlach joined the pro-business Free Democratic Party (FDP), but resigned his membership in 1993.