Omran Ben Shaaban's body was flown back to Libya by private jet on Tuesday from France, where he'd been receiving medical attention.
Video posted on internet showed thousands of mourners at a Misrata sports stadium Tuesday night. The Libyan government said it would give the 22-year-old a funeral fit for a hero. A photo was also posted of Shaaban in wooden casket, his face visible through a glass window.
"It was clear he was beaten a lot," his brother Abdullah Shaaban told the AP. "His entire chest was sliced with razors. His face had changed. It wasn't my brother that I knew."
Shaaban was then flown to France for treatment, but he died on Tuesday.
The AP reports that Shaaban belonged to a coalition of militias called Libya Shield, sanctioned and supported by the Defense Ministry.
He reportedly never received the $800,000 reward for capturing Gadhafi last October, but his brother said Shaaban considered it his duty.
Gadhafi was found hiding in a drainage pipe near his birthplace Sirte. He was dragged out and violently carried away during which time he was killed. Video posted by the aggregator Storyful appears to show Shaaban carrying a pistol while a bloodied Gadhafi pleads for his life.
Libya's congress has vowed to track down Shaaban's kidnappers. A militia commander said they would take matters into their own hands if the authorities fail.
"We will take revenge militarily but legitimately," Walid Ben Shaaban told Agence France-Presse.
"We will give the authorities an opportunity to tackle the issue but if they fail to act, we know how to make our move."