Cohen, who was 54, was thrown from his motorcycle after a collision with a car on December 20. Doctors declared him brain dead on Tuesday. He was kept on a respirator and suffered cardiac arrest early on Wednesday, hospital officials said.
Hundreds filed past Cohen's coffin during a memorial ceremony at the National Stadium in Tel Aviv, the scene of some of his most memorable moments with his boyhood club, Maccabi Tel Aviv.
"It was a big, big shock for us that Avi passed away... for the family, for the friends and of course for the nation because Avi was the captain of the national team and he was a hero," said the former Israel goalkeeper Bonnie Ginsburg, who, like Cohen, played at Glasgow Rangers.
Ginsburg and other Maccabi Tel Aviv and Israel colleagues carried Cohen's body to its final resting place at a cemetery north of Tel Aviv, where thousands of tearful mourners witnessed the burial.
Cohen became the first Israeli to play in the English top flight when he signed with Liverpool in 1979. He played with the Anfield club for more than two seasons. He made 64 appearances for Israel, 33 as captain.
Liverpool said on their website that players and fans would pay tribute to Cohen by taking part in a "period of applause" before Wednesday night's English Premier League match at home to Wolverhampton Wanderers.
Cohen's son, Tamir Cohen, plays in the Premier League for Bolton Wanderers.
