Australia lost on Thursday a popular and well-loved former first lady, Hazel Hawke, who passed away at the age of 83 after a battle with complications of dementia.

She was the ex-wife of Bob Hawke, the third longest-serving prime minister of Australia. The former couple met at a church camp when they were 18 and were married for 38 years.

Mrs Hawke endured the years with her husband despite the former PM being a hard drinker and womaniser, which she admitted hurt her but she thought it was just a difficult phase in their union.

However, in 1994, the couple divorced and Mr Hawke married Blanche D'Alpuget in 1995. Ms D'Alpuget was his biographer.

Sue Pieters-Hawke, the couple's daughter, said her mother died peacefully surrounded by the family. She said there will be a private funeral, but it will be open only to family and close friends. There will be a memorial celebration of Mrs Hawke's life, but the details will be provided later, she said.

Current Prime Minister Julia Gillard described the former first lady as a wonderful Australian.

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

"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," she added.

Ms Gillard said Mr Hawke's public achievements in the union and government were the products of Hazel's steadfast support.

Former ACTU Secretary Bill Kelty described Mrs Hawke as Australia's version of Eleanor Roosevelt and was known for her charitable works. She became the voice of Alzheimer's disease when she disclosed to the public her ailment.

Mrs Hawke has three children and six grandchildren. Mr Hawke supported Ms Gillard in the 2010 election campaign against Opposition leader Tony Abbott.