Prime Minister Julia Gillard sent her condolences to the Murdoch family on behalf of the government.
"Australia has lost an amazing Australian woman," Ms Gillard said in a statement.
"Dame Elisabeth Murdoch lived a great Australian life. Her example of kindness, humility and grace was constant. She was not only generous, she led others to generosity. Australia's children and Australia's artists have lost one of their greatest benefactors."
Ms Gillard said that Dame Elisabeth's name would be remembered.
"The death of a parent at any age is one of the saddest moments we endure in life. Dame Elisabeth's children, grandchildren, great and great-great-grandchildren and her large extended family have lost a beloved matriarch."
Opposition Leader Tony Abbott said that Australia had lost a "remarkable character as well as an extraordinary philanthropist".
"Dame Elisabeth was an inspiration to generations of Australians and a friend and supporter of many good causes in the community," he said in a statement.
"She was a great patron of the arts and a woman of style and substance. Her life was imbued with a deep commitment to helping others and her generous philanthropy will stand as one of her enduring legacies."
Mr Abbott said Dame Elisabeth left a legacy of generosity and goodness.