Tributes are pouring in from across the political divide for the Royalla-based senator, who had been diagnosed with an "aggressive" form of cancer in April 2021.

Liberal leader Peter Dutton said Australia had "lost a patriot, a decent an honourable man and above all and most importantly an incredible family man", while Prime Minister Anthony Albanese said Senator Molan had "lived his life in service to the country".

In a statement, Senator Molan's family said the politician had died peacefully in their arms on Monday after his condition deteriorated after Christmas.

"He was many things - a solider, a pilot, an author, a volunteer firefighter, and a senator. Most of all, he was an adored husband, father, grandfather, and brother," the statement read.

"Our loss is immeasurable, but we are comforted in our memories of a full life courageously lived, devoted to family and in service of the country he loved.

"We thank you for your thoughts and prayers, and for respecting our privacy at this difficult time."

Senator Molan's death creates a vacancy in the Senate, which will be filled by a Liberal from NSW.

"The division undertake a process to select a candidate to fill the casual vacancy in due course," a NSW Liberals spokesman said.

The father-of-four served in the Australian Army for 40 years, including deployments to Papua New Guinea, Indonesia, East Timor, Malaysia, Germany, United States and Iraq.

In 2004, he served for a year as the chief of operations of coalition forces in Iraq.

Defence Minister Richard Marles said Senator Molan had been a "fierce advocate for our nation".

Senator Molan's involvement in politics started in 2013 when he was appointed by the Abbott government to help design Operation Sovereign Borders, the military-led operation to stop asylum seeker boats reaching Australia.

He entered Federal Parliament in 2018, replacing Nationals senator Fiona Nash after she was caught up in the section 44 citizenship saga.

After being relegated to an unwinnable fourth spot on the NSW Liberal ticket ahead of the 2019 election, he broke ranks and encouraged people to vote for him directly.

A huge first preference vote wasn't enough to get him across the line, but he would eventually return to the upper house after the resignation of Liberal senator Arthur Sinodinos.

He is survived by his wife, Anne, and four children, Sarah, Erin, Felicity and Michael.

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