Best known for her colourful still life paintings, Olley, who was found dead at her Sydney home, was one of Australia's most important and respected artists.

"She was a painter -- there was absolutely no other career for her," gallery director Edmund Capon said, adding her work was in the grand tradition of the still life.

"As a painter Margaret found a wealth of beauty, humanity and inspiration in the most humble and prosaic of things -- bowls of fruit, flowers interiors."

University of Sydney Professor Colin Rhodes said Olley was the last of a generation of empowering figures in Australian art.

"Olley was a leader in that generation that brought homegrown Australian art to the rest of the world, but importantly to Australia itself," he told AAP news agency.

"Although she lived to a grand old age, she never lost her relevance."

In a career that spanned decades, Olley also sat for many portraits by other artists and was twice the subject of the winning entry to the Archibald Prize; in a 1948 work by William Dobell, and a 2011 painting by Ben Quilty.

The artist was awarded Australia's highest civilian honour, the Companion of the Order of Australia, in 2006 for her philanthropy to the arts and her encouragement of emerging talent.

Copyright AFP (Agence France-Presse), 2011