Music industry icon Michael Gudinski will be farewelled with a state funeral.

Victorian Premier Daniel Andrews said he visited Gudinski’s widow Sue on Tuesday night and she accepted the offer.

Gudinski died in his sleep on Monday night aged 68, stunning the entertainment industry.

A giant of the local music industry, Gudinski’s passing sparked widespread tributes, including from Ed Sheeran, Kylie Minogue and Russell Crowe.

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“We will be able to come together in an iconic venue and celebrate his life, the mark he made and the legacy he leaves,” Mr Andrews said.

“I don’t know many people who loved Melbourne more than Michael did – Melbourne and Victoria loved him as well and we miss him terribly.”

The Premier said he learned of Gudinski’s death from a text message on Tuesday morning, as he arrived at the Exhibition Buildings for the mental health royal commission report.

“He kind of got his act together over the last 12 months, he lost a lot of weight, he was much fitter and healthier,” he said.

“It was a great shock, but you have to push on … I just extend my deepest sympathies to Sue and the kids.

“He was a good friend of mine, a great Victorian and he will be missed.”

-with AAP