The man who transformed Dubai from a dusty Gulf city into a glitzy metropolis took over as ruler of the booming emirate, succeeding his elder brother who died yesterday.
The UAE's Defence Minister and world renowned racehorse breeder Sheikh Mohammed bin Rashid al-Maktoum succeeded Sheikh Maktoum bin Rashid al-Maktoum, who was also vice president and Prime Minister of the United Arab Emirates.
The elder Maktoum died in Australia yesterday. He was in his early 60s and had suffered heart problems.
"The UAE has today lost a historical leader who dedicated his life to building the nation and doing good for its people," a statement from the UAE presidency said.
The UAE is a federation of seven emirates which include Dubai. Each emirate has a separate ruler and heir apparent, who preside over a local government.
Internationally, the brothers had been well known as co-owners of Dubai's Godolphin stables which competes in major horse races. The younger brother was the more high profile of the two in racing circles and spent several weeks a year in Britain.
At home, the elder Maktoum maintained a low profile, preferring to allow his younger brothers to run the day-to-day affairs of Dubai, the Gulf region's trade and tourism hub.
"In his quiet way, Sheikh Maktoum was a pillar of the federation," Anthony Harris, a former British ambassador to the UAE said. "He... was remarkable for an Arab leader because he allowed his younger brothers to have a higher profile."
The new ruler has been credited with presiding over Dubai's transformation into a hub for trade, finance, property and tourism - marked by opulent shopping malls and futuristic architecture - to wean itself off dwindling oil reserves. The capital Abu Dhabi holds most of the oil wealth of the UAE, an Organisation of the Petroleum Exporting Countries.
Economists said they did not expect Sheikh Maktoum's death to impact Dubai's booming economy.
"I don't see too many changes. In recent years his (Sheikh Maktoum's) role was very limited as an active maker of policy," said Simon Williams at the Economist Intelligence Unit. "His brother Sheikh Mohammed has been the real driving force."
The UAE's main stock markets halted trading after the news was announced. The Dubai Gold and Commodities Exchange said it would close for a week from today.
Officials said UAE President Sheikh Khalifa bin Zayed al-Nahayan would also soon appoint a new prime minister and vice president for the Gulf Arab state to succeed Sheikh Maktoum.
Sheikh Maktoum's body would arrive in Dubai for burial today, Dubai's official WAM news agency said. The UAE declared 40 days of mourning and state institutions will close for a week.
Condolences poured in from leaders around the world. German Chancellor Angela Merkel said the country had lost a friend. Egyptian Prime Minister Ahmed Nazif will attend the funeral.
"Sheikh Maktoum's accomplishments and his striking contributions to Dubai and the UAE's development will be everlasting in everyone's mind," W. David Hutton, Canada's ambassador to the UAE, told the WAM news agency.
Sheikh Maktoum officially took over as ruler of Dubai in 1990, when his father Sheikh Rashid died after a long illness.