Her daughter Sue Pieters-Hawke announced on behalf of the family last night that Mrs Hawke had died peacefully, surrounded by family.

The family had been with Mrs Hawke during her last days as she finally succumbed to complications of dementia, Ms Pieters Hawke said.

"The family appreciates the great affection many have for Hazel, but ask for privacy at this stage," she said.

Mrs Hawke was divorced from the former Prime Minister Bob Hawke in 1995 after 39 years of marriage. She and Mr Hawke had four children: Ms Pieters-Hawke, Stephen, Roslyn and Robert Jr, who died as a baby in 1963.

The Prime Minister, Julia Gillard, said last night "we have lost a wonderful Australia".

"Ordinary Australians saw the best of themselves in Hazel - many women of her generation will feel they have lost a friend," Ms Gillard said.

"Hazel was one of those rare people who are liked and respected in equal measure. Her warmth and generosity of spirit in success were only matched by her courage and dignity in adversity.

"Bob Hawke's public achievements in the union movement and in Government are unthinkable without Hazel's steadfast support."

Ms Gillard said her Government would discuss with Mrs Hawke's family "an appropriate way to recognise Hazel's contribution to public life".

The Opposition Leader, Tony Abbott, said Australians were mourning the passing of Mrs Hawke. "Hazel Hawke was widely respected and admired in our community," Mr Abbott said.

"She was much loved for her courage in facing up to and raising awareness of Alzheimer's disease.

"Our thoughts and prayers are with her family and friends at this sad time. She will be greatly missed"

Mrs Hawke, who was widely regarded as an Australian national treasure, was diagnosed with Alzheimers Disease in 2001. She publicly announced her affliction on an ABC TV episode of Australian Story in 2003 to raise awareness of the condition and to gain publicity for a fund she had jointly set up with Alzheimer's Australia.

The president of Alzheimers Australia, Ita Buttrose, praised Mrs Hawke's contribution to campaigning for a cure.

“Hazel Hawke's life was a life to celebrate and one devoted to many causes and especially those Australians who suffered disadvantage," Ms Buttrose said.

“Hazel embodied a sense of fairness and concern for other Australians. She was the first and only well-known Australian to speak publicly about her life with Alzheimer's disease.

“Her courage to speak openly about her dementia journey has left a lasting legacy in raising the profile of Alzheimer's disease and reducing the strong sense of isolation that thousands of Australians with dementia experience.

“It took remarkable courage to make public appearances after her diagnosis in order to raise awareness of the disease and tackle stigma head on."

The CEO of Alzheimer's Australia, Glenn Rees, said Mrs Hawke's advocacy for people with dementia would never be forgotten.

“She made a great and personal commitment to dementia research and particularly to improving the quality of dementia care through the Hazel Hawke Alzheimer's Research and Care Fund,” Mr Rees said.

The leader of The Greens, Christine Milne, tweeted "Vale Hazel Hawke. A wonderful contribution to the life of the nation incl WWF, NSW Heritage Council, Children's television, music + the Arts".

Nationals Senator Barnaby Joyce praised Mrs Hawke as "A good person - God bless".

"Hazel Hawke: she was the Australian representation of the warmth and familiarity of a mum," Senator Joyce tweeted.

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