Scheel, who led the pro-business Free Democrats (FDP), served as foreign minister in Willy Brandt's centre-left coalition from 1969 to 1974, a period during which he spearheaded key agreements with the Eastern bloc.
President Joachim Gauck paid tribute to Scheel, who he said “helped shape the destiny of our country for many years in a special way”.
“He made a lasting contribution to understanding and reconciliation on our continent,” said Gauck.
Foreign Minister Frank-Walter Steinmeier described Scheel as “one of the pioneers of Germany's Ostpolitik.”
“The treaties negotiated by Walter Scheel, including with the Soviet Union and Poland as well as other Eastern bloc agreements, were historic landmarks of the policy of detente that led to German reunification and ended the division of Europe,” he said in a statement.
Born July 8th 1919 in the western city of Solingen, Scheel served as chancellor for nine days in 1974 after Brandt's resignation in a spying scandal.
He was elected as president later that year, a post which he held until 1979.