Gough Whitlam, the former Australian prime minister known for leading the nation through a period of massive change, has died aged 98.

Whitlam led the reformist centre-left Australian Labor Party into power at elections in 1972 for the first time in a generation.

He was dismissed in 1975 by Governor-General Sir John Kerr, who represented the British monarch, who is Australia's head of state.

It was the only time since the Australian federation was established in 1901 that a governor-general had dismissed a democratically elected government.

"Our father, Gough Whitlam, has died this morning at the age of 98," Whitlam's children Antony, Nicholas, Stephen and Catherine said in a statement on Monday.

"A loving and generous father, he was a source of inspiration to us and our families and for millions of Australians."

Tony Abbott, Australia's current prime minister, called Whitlam "a giant of his time" and instructed flags around the country to be flown at half-mast.

Despite being in power for only three years, Whitlam launched sweeping reforms of the nation's economic and cultural affairs, cementing his place as one of Australia's most revered and respected leaders.

Death penalty abolished

Whitlam stopped conscription, introduced free university education, recognised communist China, pulled troops from Vietnam and reduced the voting age to 18.

Furthermore, he abolished the death penalty for federal crimes, extended welfare to single parents and reformed divorce laws.

Whitlam was also the first Australian leader to visit China. Criticism of his diplomatic overtures was blunted by US President Richard Nixon's own China rapprochement.

Whitlam led the Labor Party to its first victory in 23 years at the December 1972 election on the back of the famous "It's Time" campaign, before being dismissed on November 11, 1975.

The dismissal and unfounded rumours of CIA involvement were the culmination of a political drama which began in October with the refusal of the parliament's upper house, the Senate, to pass crucial spending bills.

Whitlam's Labor Party did not hold the necessary majority in the Senate to pass a budget bill until the government agreed to call a general election.

To end the standoff, Kerr took the unprecedented step of sacking Whitlam and installing then opposition leader Malcolm Fraser as caretaker prime minister.

Source: Agencies