Azbar Ali Hajavi, also known as Dehqan-e Fadakar ("devoted peasant"), was taken to a hospital in the city of Tabriz on November 14 and died on Saturday of pneumonia and kidney failure, Iranian media reported.
Following his death, a day of mourning was declared in his home city of Mianeh, Iran.
The man, who was born in February 1931, became a national hero after he had prevented a train incident that could have claimed the lives of dozens of passengers.
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The story begins on a cold night in 1961, when the 32-year-old Hajavi saw that a part of the railway he was walking along was blocked by mountainside debris.
The young man removed his jacket despite severe frost, tied it to a stick and set it on fire while running toward a moving train and screaming at the top of his lungs in an attempt to attract the train conductor's attention.
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When he saw that the conductor did not understand his actions, Hajavi fired his gun into the air, a move that eventually helped to stop the train and prevent the collision.
For many years, Hajavi's story has been taught to primary school pupils all across the country.