Joseph Fan Zhongliang, the 97 year old Bishop of Shanghai, died on Sunday evening in his home while under house arrest.
According to the US-based Cardinal Kung Foundation, supporters of Bishop Fan held a mass at his apartment immediately after his death.
Shanghai government officials ordered the body to be transferred to a funeral home immediately after the service.
China has between eight and 12 million Catholics who attend the state-supported Chinese Catholic Patriotic Association - described by Pope Benedict XVI as "independent of the Holy See, in the religious sphere", and the so-called underground church which remains loyal to the Vatican.
The underground church, anticipating more than 2,000 in attendance, asked for his farewell service to be held at St Ignatius Cathedral. However the authorities denied this request, and it is expected that the funeral will not be permitted to use any official episcopal insignia of any kind, as the Chinese state does not recognise Fan's position as an official Catholic bishop.
Bishop Fan was baptised in the 1932 aged 14. He joined the Jesuits in 1938 and was ordained as a priest in 1951.
On September 8, 1955, he was arrested along with many other priests including the then Bishop of Shanghai, Ignatius Kung Pin-Mei.
He was convicted of counter revolutionary activities in 1958, sentenced to 20 years in jail, and sent to a work camp in Qinghai province.
After his release in 1978, he took up teaching, and then on February 27, 1985, the Bishop of Qinghai named him Coadjutor Bishop of Shanghai while the original bishop was in jail.
During his time in office, he was routinely harassed by the security forces. On one occasion in 1992 his personal accounts as well as those of several members of the underground Catholic Church were frozen by the state.
In 2000, Ignatius Kung Pin-Mei died in the US after a long prison sentence.
Bishop Fan was ordained to the position of Bishop of Shanghai by Pope John Paul II but he was not recognised as holding that position by Chinese authorities, as the Vatican and China had severed diplomatic relations since 1949 when the Communists took power.
The Chinese authorities instead recognised Aloysius Jin Luxian, who agreed to work with Bishop Fan, and in 2005 the Vatican recognised Jin as Apostolic Administrator to Bishop Fan. Together they also named Joseph Xing Wenzhi as their axillary.
Since the death of Jin, the Chinese authorities have refused to recognise the legitimacy of Bishop Fan and the seat of the Bishopric of Shanghai has been vacant since 2012.
Thaddeus Ma Daqin was agreed upon between the Vatican and the Chinese state but was arrested by Chinese authorities after he stepped down from the Chinese Catholic Patriotic Association.