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.
The last surviving founder of the left-wing Sandinista movement in Nicaragua, Tomas Borge, has died aged 81.