Australian Prime Minister Tony Abbott has paid tribute to Mr Lee Kuan Yew, saying the region owes much to Singapore's former prime minister.

"Today we mourn the passing of a giant in our region," Mr Abott said in a statement.

"Fifty years ago, Lee Kuan Yew led a vulnerable fledgling nation to independence.

"Today, thanks to his vision and determination, Singapore is one of the world's most successful countries.

"In Lee Kuan Yew's own words, Singapore's remarkable journey has been from 'third world to first','' Mr Abott said.

"Thanks to his leadership, Singapore is now one of the world's most prosperous nations, a financial powerhouse, and one of the world's easiest places to do business.

"Our region owes much to Lee Kuan Yew,'' he added.

Mr Abbott also said in Australia and beyond, leaders sought and learnt from Mr Lee's wise counsel.

"As Prime Minister, Lee Kuan Yew enjoyed close relationships with successive Australian Prime Minister and worked with them to establish the strong partnership that Singapore and Australia have today.

"At every stage, Australia and Singapore have stood shoulder to shoulder. We continue to do so today, as we salute one of the significant leaders of our time.

"On behalf of the Australian government and people, I extend my condolences to Mr Lee's family and to the people of Singapore," said Mr Abbott.

Australian Foreign Minister Julie Bishop told Sky News that the passing of Mr Lee marked the end of an era.

"Lee Kuan Yew was a towering figure not only in Singapore, not only in our region but also globally .. and he'll be missed. He had a profound influence over Singapore's development. Quite an extraordinary tale the development of Singapore and Lee Kuan Yew was responsible for so much of that."

"He was a giant of Singaporean political life and was responsible for so much of Singapore's development into the dynamic economy and society that it is," Ms Bishop told Sky News.