Nolf, a member of the Topsport Vlaanderen team, was found dead by teammate Kristof Goddaert in their 14th floor shared room at the Ritz-Carlton.
Organisers of the race, ASO (Amaury Sports Organisation) confirmed the death of Nolf and the day's stage - from the Camel Race Track to the Doha Foundation - was preceded by a minute's silence in his memory while the race was to be 'neutralised' out of respect for him.
"Out of respect for Frederiek Nolf, the riders will form a cortege throughout the stage," said Merckx.
Nolf's teammates, in shock at the news, did not start the stage.
The Belgian rider, who turned professional last year, would have celebrated his 22nd birthday on February 10.
Race director Christian Prudhomme said a ceremony in memory of Nolf would be held following the stage at six p.m. (1500 GMT) at the team hotel.
Goddaert said he found Nolf unconscious and tried, in vain, to wake him before alerting team officials and a team doctor.
"I tried shaking Frederiek's leg and told him to waken up, but I quickly realised that something was wrong. I took his hand but it was cold and there was no pulse," said team manager Jean-Pierre Heynderrickx
The Belgian cycling legend added: "I spoke to his team manager (Heynderrickx) who told me there was nothing to indicate that something like this could happen. Yesterday (Wednesday) Frederiek seemed in good health."
Nolf's body was to be quickly repatriated to Belgium where his parents and fiancee had been informed of his death, the Belgian ambassador said.
An autopsy would follow to determine the causes of death.
The last time a cyclist died in his sleep was in 2003 when Frenchman Fabrice Salanson, 23, died in similar circumstances at the Tour of Germany.