Pope Benedict said he was deeply saddened by the death of Cardinal Daly, who was 92, and passed his condolences to his family, fellow clergy and all the people of Ireland.
"I recall with gratitude Cardinal Daly's long years of devoted pastoral service to the church as priest, bishop and primate of all Ireland, his assistance as a member of the college of cardinals and especially his sustained efforts in the promotion of justice and peace in Northern Ireland," he said.
He paid tribute to the late cleric as hundreds of mourners filed past his open coffin inside St Peter's Cathedral in west Belfast.
Earlier, senior clerics joined church representatives of different faiths, politicians and members of the public as the body of the 92-year-old was carried inside.
The retired church leader died on Thursday in Belfast City Hospital after a short illness.
Cardinal Daly was Archbishop of Armagh and Catholic Primate of all Ireland from 1990 until 1996, but for much of his career he was based at St Peter's.
His body will lie in state inside the cathedral until Sunday, before it is taken to Armagh ahead of Requiem Mass at Ireland's ecclesiastical capital, St Patric's Cathedral on Tuesday.
Pope Benedict said his thoughts and prayers were with the mourners as they prepared to lay the cardinal to rest.
"To all gathered for the solemn rites of Christian burial and especially to Cardinal Daly's relatives and friends, I cordially impart my apostolic blessing as a pledge of consolation and hope in the Lord," he said in a statement.
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