"Our father, Gough Whitlam, has died this morning at the age of 98," his children Antony, Nicholas, Stephen and Catherine said in a statement.
"A loving and generous father, he was a source of inspiration to us and our families and for millions of Australians."
Conservative Prime Minister Tony Abbott called the Labor stalwart "a giant of his time" and instructed flags around the country to be flown at half mast.
"He united the Australian Labor Party ... and seemed, in so many ways, larger than life," said Abbott of a man who spent the later years of his life in a Sydney aged care home.
The flamboyant Whitlam remained one of Australias most towering figures despite being the only prime minister to be sacked, a touchstone moment in the nations political history.
He led Labor to its first victory in 23 years at the December 1972 election on the back of the famous "Its Time" campaign, before being sensationally sacked in 1975 by Governor-General Sir John Kerr, the Queens representative.
His dismissal was prompted by a refusal by parliaments upper house, where his Labor Party did not hold a majority, to pass a budget bill until the government agreed to call a general election.
To end the impasse, Kerr took the unprecedented step of sacking Whitlam and installing then opposition leader Malcolm Fraser as caretaker prime minister.
Despite being in power for only three turbulent years, Whitlam launched sweeping reforms of the nations economic and cultural affairs, cementing his place as one of Australias most revered and respected leaders.
He stopped conscription, introduced free university education, recognised communist China, pulled troops from Vietnam, abolished the death penalty for federal crimes and reduced the voting age to 18.
The Labor titan was also the first Australian leader to visit China.
His family said there would be a private cremation and a public memorial service.
Editor: Ella Syafputri
Copyright © ANTARA 2014
