"She took her cancer journey and used that to save lives and change lives, and that's just a deeply impressive thing," said Victorian Premier Daniel Andrews. Photo / Getty Images

The family of Olivia Newton-John have accepted Victorian Premier Daniel Andrews' offer for a state funeral.

The Grease star died at her ranch in California after a three-decade battle with cancer. She was 73.

Newton-John's niece Totti Goldsmith, who lives in Melbourne, told A Current Affair on Tuesday night that the family welcomed the offer.

"On behalf of not just our family but I think Australia needs it," Goldsmith said.

"She's so loved and I think our country needs it so we're going to accept it."

Premier Andrews earlier said his government would speak to Newton-John's family about hosting an official farewell.

"As for celebrating her life ... her music and film and all the other amazing contributions that she made, we would, of course, want to speak to the family and be as respectful as we can," Andrews said on Tuesday.

"She took her cancer journey and used that to save lives and change lives, and that's just a deeply impressive thing.

"The research that's done there (at the cancer and wellness centre), the treatment, the care, the love and support that is central to that place is a lasting legacy to the person that she was."

In a family statement, Newton-John's husband John Easterling said his partner "passed away peacefully" surrounded by family and friends, describing his late wife as "a symbol of triumphs and hope".

"Dame Olivia Newton-John (73) passed away peacefully at her Ranch in Southern California this morning, surrounded by family and friends. We ask that everyone please respect the family's privacy during this very difficult time," the statement read.

The statement continued: "Olivia has been a symbol of triumphs and hope for over 30 years sharing her journey with breast cancer. Her healing inspiration and pioneering experience with plant medicine continues with the Olivia Newton-John Foundation Fund, dedicated to researching plant medicine and cancer. In lieu of flowers, the family asks that any donations be made in her memory to the @onjfoundation.

"Olivia is survived by her husband John Easterling; daughter Chloe Lattanzi; sister Sarah Newton-John; brother Toby Newton-John; nieces and nephews Tottie, Fiona and Brett Goldsmith; Emerson, Charlie, Zac, Jeremy, Randall, and Pierz Newton-John; Jude Newton-Stock, Layla Lee; Kira and Tasha Edelstein; and Brin and Valerie Hall."

In 2019, Newton-John told US TV host Gayle King on the CBS Sunday Morning program that she coped with cancer by being – to a certain extent – in "denial" about it.

"Denial is really good. It's really healthy."

The singer said thinking about cancer was "consuming" her day.

"And after a time I went, you know what, I don't know what my time is; I need to enjoy my life.

"So I'm going to eat a cookie. And I'm going to have a cup of tea if I want to; and if I want to have a little bit of wine, I'm going to do that because the joy of life and everyday living has to be a part of that healing process as well."