Tributes have flowed in for former NSW premier Neville Wran who has died aged 87.

Australian Labor has lost a “giant” with the death of Neville Wran, who led NSW as premier for a decade.

Mr Wran, 87, died with his family by his bedside just before 6pm on Sunday at the Lulworth House nursing home in Sydney’s eastern suburbs, where he had been in care for the past two years.

He suffered from dementia.

“This is of course a very sad time for us all, but in fact a blessed release for Neville,” his wife, Jill Hickson, said in a statement to AAP.

“Dementia is a cruel fate and I have been grieving the loss that comes with it for some years.

“But I hope now, especially in this political climate, people will join me in celebrating the life of a great man, a true political hero.”

Federal Opposition Leader Bill Shorten said the Australian Labor Party had lost a giant.

“Few are made as tough, as smart and as honourable as Neville Wran,” he said.

“After 1975, the Wranslides helped rebuild Labor in New South Wales and nationally. It was Neville who kept the light on the hill burning bright.”

Mr Wran was a decent man of the utmost integrity, he said.

Liberal Mike Baird, who became NSW Premier last week, said he was deeply saddened and described Mr Wran as a towering figure in the NSW Labor Party and in the state during the 1970s and `80s.

Federal Communications Minister Malcolm Turnbull said Mr Wran was a dear friend, great business partner and mentor.

“We send our love and condolences to his family especially Jill, his wife, and his children Kim, Glenn, Harriet and Hugo,” he said.

“He was a true believer, a doer, a reformer and a builder.

“There was nobody better to have on your side in a crisis than Neville – a remarkable combination of sagacity and solidarity.”

Bob Carr, who surpassed Mr Wran’s record for the longest continuous service as NSW premier, said Mr Wran set a template for successful Labor leaders, including prime ministers Bob Hawke and Paul Keating.

“He was a master politician,” Mr Carr told Sky News.

“He presented a model of stable state government that had a big impact on future Labor governments that followed his.”

Barry O’Farrell, who last week stood down as NSW premier, tweeted: “Sad news. Neville Wran helped build NSW including initiating our sister-state relationship with China’s Guangdong province in 1979.”

Mr Wran led the Labor government in NSW from May 1976 to July 1986, before dramatically announcing his resignation to a shocked Labor conference.

He was a successful lawyer before entering parliament in the Legislative Council in 1970. He moved to the lower house in 1973 before becoming Labor leader.

In 1976, he led Labor to government in a tight election, forming government after a 10-day wait, with the support of an independent.

Mr Wran and his government were involved in damaging scandals.

In 1983, he stepped aside while a royal commission examined allegations he’d tried to influence a magistrate over a misappropriation hearing against rugby league boss Kevin Humphreys. He was cleared.

Prisons minister Rex Jackson was jailed for selling early releases and chief magistrate Murray Farquhar was jailed for perverting the course of justice. Senior police were caught up in corruption scandals.

Mr Wran was fined $25,000 for contempt of court after declaring his belief in the innocence of his old friend Lionel Murphy, the High Court judge facing a charge of attempting to pervert the course of justice.

After politics, Mr Wran had success in the business world, including running a merchant bank with Mr Turnbull.

Mr Wran was married twice, first to Marcia Oliver, whose son he adopted before they had two more children, and then to Ms Hickson, with whom he had two children.

He was put into care as dementia took hold two years ago.