Rifleman Sachin Limbu, 23, from the 1st Battalion the Royal Gurkha Rifles, died at Queen Elizabeth Hospital on Monday.
He was injured in a bomb blast in June 2010 while on a patrol to deter insurgent activity in Walizi Village.
The Nepal-born soldier’s death takes the number of UK personnel killed in Afghan operations since 2001 to 395.
The MoD said Rifleman Sachin died with his parents by his side.
Mr Dillisher Limbu, Rifleman Sachin’s father and a retired Gurkha soldier, said: “My wife and I are immensely proud of our only beloved son who has sacrificed his life for the good of others.
“Sachin was our only son and we both extend our sincere thanks to all the staff at The New Queen Elizabeth hospital and Brigade of Gurkhas who have supported us all so closely.”
From Rajghat, Morang in Nepal, Rifleman Sachin was brought up in the life and community of 7th Gurkha Rifles and later 2nd Battalion The Royal Gurkha Rifles in Hong Kong and Brunei. He joined the Brigade of Gurkhas in 2007.
Lt Col David Robinson, commanding officer of 1 RGR, said Rifleman Sachin had shown “remarkable tenacity” in his fight to recover after being “terribly injured”.
“Rifleman Sachin’s sacrifice has prevented him from fulfilling a rewarding career but his inspiring determination not to succumb to his injuries for so long was in the true spirit of those Gurkhas who have gone before him.
“He was highly cherished and loved by his fellow Gurkhas and left his mark on all those that had the honour to meet him. As the only son of a retired Gurkha this will have been devastating for his family; our thoughts and prayers are with them at this difficult time.”