One Word: Timeline. All you need to have to set this up is two Virtual Camera's (Cinemachine), one with a 'night' color grading and one with a 'day' color grading, and you use Timeline to blend between the two. Works perfectly.

The two Virtual Camera's are parented to the main camera, so their position remains the same, it's only the grading that blends.

Want to see this in action? Check out our game below:

https://ldjam.com/events/ludum-dare/43/duskhearth