Japan's Prime Minister Shinzo Abe, India's Narendra Modi, Indonesia's Joko Widodo and former U.S. President Bill Clinton were among the leaders brushing shoulders with Lee's family and Singapore politicians at the ceremony attended by 2,200 people.
Lee, who died aged 91 on Monday, is credited with founding modern Singapore and transforming it from a small, colonial British trading port into one of the world's wealthiest nations.
His death has prompted an unprecedented show of mourning and Prime Minister Lee Hsien Loong, Lee's son, battled tears as he delivered a 40-minute eulogy in English, Malay, and Chinese.
"His was the original Singapore Roar: passionate, formidable and indomitable," he said.
"To those who seek Mr Lee Kuan Yew's monument, Singaporeans can reply proudly: 'look around you'".
Public warning sirens sounded across the country to mark a minute's silence, with buses and trains coming to a halt.
Earlier, booms from a 21-gun salute had reverberated around the city's business district, fighter jets had flown overhead in formation and two navy ships near the marina made an 'L' 'K' 'Y' signal with their flags as Lee's coffin was taken from the country's parliament to the funeral.
Singaporeans, many dressed in the mourning colors of black and white, waited for hours to watch the procession, shouting "Lee Kuan Yew" as it passed. More than 100,000 people lined the streets to bid farewell to the departed leader.
"His biggest achievement is to help elevate people's living standards," said Huang Jiancong, 54, who was standing at the start of the route, carrying a Singapore flag.
Lee's influence on the international stage - he was both a regular visitor to the White House and held up as a role model by China's Deng Xiaoping - was reflected in the funeral's turnout of serving and former leaders from across the globe.
The younger Lee said Singapore's first prime minister had elevated the country to the global arena and so despite being so small, "Singapore's voice is heard, and we enjoy far more influence on the world stage than we have any reason to expect."
Vice President Li Yuanchao represented China while Clinton and ex-secretary of state Henry Kissinger, a close friend of Lee's, came for the United States. Britain's William Hague, leader of the House of Commons, represented Singapore's former colonial power.
However, most of the serving leaders in attendance were from Asia, perhaps a reflection of the region's ascendancy during Lee's lifetime.
Lee's death, less than five months before the city-state's 50th anniversary of independence, has triggered a huge outpouring of grief among its population of 5.4 million people.
Almost 500,000 went to see Lee lying in state over the past four days, many queuing in the tropical sun for up to 10 hours to pay their final respects. More than 1 million have visited condolence sites set up at community centers across the country.
It has also revived memories of Lee's iron-fisted approach to opponents who tried to cross him, something his former colleagues said was needed for the country's security.
"To those he believed were out to destroy Singapore, he put on his knuckle-dusters," Goh Chok Tong, the prime minister who succeeded Lee, said in his eulogy.
Commercial activity in the country known for its business-focus slowed for the ceremony, with many shops and the country's two large casinos closing.
Screens along Orchard Road, the main shopping street, all showed the ceremony.
"I saw Singapore change from nothing to today. I hope Singapore will carry on without Mr Lee," said Tan Soon Wah, 60.
The somber mood extended beyond Singapore, with India and New Zealand observing an official day of mourning on Sunday.
Lee's body was cremated in a private ceremony for his family later on Sunday.
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