Mukhtar Masih, 70, along with his wife, children and grandchildren, were arrested in January following claims by local Muslims from the village of Lambanwali that Mr Masih had written blasphemous messages and pinned them to the door of a local mosque.
Mr Masih was charged and granted bail in May and the British Pakistani Christian Association (BPCA) believed he "had a real chance of overturning his false charges".
However, on Thursday, he was taken to Bagh Christian Hospital in Mansehra after complaining about abdominal pain and died later that day.
An autopsy declared death by gastro-intestinal bleeding.
The family have raised concerns that his premature death has left them vulnerable and despised by Muslims, despite their insistence that he is innocent.
Mehwish Bhatti, lead officer for the BPCA in Pakistan, said: "It is with great regret that I share this news as we were extremely confident that Mukhtar would be exonerated and that his reputation would once again become unsullied.
"His distraught family have expressed great disappointment that Mukhtar Masih died with charges of blasphemy over his head. We are challenging our local MP's to call for a posthumous exoneration for a man who did not commit any crime.
"Mukhtar's only offence was the hurt he apparently caused to Muslims for adhering to the Christian faith."
