Borge helped to create the Sandinista National Liberation Front in 1961.
In 1979, the Sandinista revolution overthrew dictator Anastasio Somoza and Borge served as interior minister in the new government of Daniel Ortega.
US President Ronald Reagan saw the revolutionaries as a threat and backed the right-wing Contras in the civil war that followed.
An estimated 30,000 people died in the fighting which lasted a decade and wrecked the country's economy.
Borge was born into a poor family and dedicated himself to the struggle against the Somoza family, which had run Nicaragua for 40 years.
He received military training in Cuba before he helped to found the Sandinista movement.
The organisation was named after Augusto Cesar Sandino, who fought against US intervention in Nicaragua in the 1930s.
Borge became the powerful interior minister in the Ortega government of the 1980s, where he imposed censorship on the media and was accused of human rights violations.
However, he denied accusations that he was responsible for expelling and harassing clergymen during the war.
The Sandinistas were voted out of power in 1990.
Congressman Jacinto Suarez was quoted by the Associated Press news agency as saying Borge was "a transcendental figure in Nicaraguan history".
But the news agency also quoted Nicaraguan writer Gioconda Belli, who said of Borge's later life: "After 1990, I have the sense he gave up his revolutionary ideas... He ended up a tragic-comic figure".
Borge's final years saw Daniel Ortega return to government - he won presidential elections in 2006 and again in 2011.
Borge was admitted to hospital earlier this month for a lung infection and underwent surgery.

Natural Resources Wales (NRW) - which is objecting to the £1.1bn project - said the likely impact of climate change had be taken into account.
NRW was giving evidence at a public inquiry into the plans in Newport.
Lawyers for the Welsh Government said it was "inconceivable" sea defences would not be maintained.
The proposed route of the relief road would cross areas of tidal floodplain within the Severn Estuary on a raised embankment.
Gary Purnell, a technical specialist for NRW's flood risk analysis team, told the inquiry that proposals to manage tidal flood risk had not been guaranteed over the lifetime of the project.
An assumption that defences would be maintained was not satisfactory, he said.
The proposed M4 scheme would increase tidal flooding risk to properties south of the new motorway, whilst benefiting properties to the north, he claimed.
Should sea defences not be improved throughout the lifetime of the scheme there was a "serious risk of flooding in that area" in light of climate change.
Commitments to flood protection had been made in the case of the HS2 project and the Thames Tideway Tunnel, he added.
But Morag Ellis QC, representing the Welsh Government, said for NRW to query whether funding would be available was to "underplay the serious risk" that climate change posed in future.
It was the government's position that it was "inconceivable" that measures would not be put in place, otherwise vast areas of Newport and Cardiff as well as important road infrastructure, power lines and industry would be at threat, she said.
She added it was not for NRW to question government policy or the allocation of funding and that both these issues were beyond the scope of the inquiry.
NRW's evidence will continue with objections set to be discussed surrounding the road's impact on Sites of Special Scientific Interest and protected species such as dormice.
The inquiry heard that following weeks of dialogue and work to address issues between Welsh Government and NRW officials, a number of other objections had been removed.
The last surviving founder of the left-wing Sandinista movement in Nicaragua, Tomas Borge, has died aged 81.
[NEXT_CONCEPT]
A long-term commitment to fund flood defences along the route of the M4 relief road is needed before the scheme goes ahead, it has been argued.