Asbestos campaigner Bernie Banton has died.

Phil Davey, a family friend, said Mr Banton died peacefully in his sleep.

"Bernie Banton died peacefully in his sleep this morning at around 1am (AEDT).

"He was at home and was surrounded by his family.

"Bernie's family has asked me to thank the Australian community on their behalf for their support for Bernie."

Mr Davey said the family requests privacy in this difficult time.

NSW Premier Morris Iemma is this morning expected to offer Mr Banton's family a state funeral for the asbestos campaigner, with an announcement on the matter due later today.

"I'm certainly offering a state funeral and we'll abide by the wishes of (Mr Banton's wife) Karen and the family. It's the least that we can do," Mr Iemma said.

Mr Banton was most recently praised by prime-minister-elect Kevin Rudd in the Labor leader's election victory speech on Saturday night.

Mr Rudd lauded Mr Banton and the unions that had supported him in his fight for compensation for asbestos disease sufferers.

"Mate, you are not going to be forgotten in this place," Mr Rudd said.

"When so many were prepared to cast you to one side, Bernie Banton, you have been a beacon and clarion call for what is decent and necessary in life and I salute you."

Family relayed the praise to Mr Banton, who had been in Sydney's Concord Hospital receiving palliative care for the terminal asbestos-related cancer mesothelioma.

Last Thursday, Mr Banton won a confidential payout as compensation for his terminal mesothelioma, after he was awarded $800,000 compensation for asbestosis in 2000.

The case was settled early to finalise it in Mr Banton's lifetime, give him some closure and provide a leg-up to other asbestos victims in claiming similar exemplary damages.

Mr Banton's lawyer Tanya Segelov said the case was a first for the $4 billion James Hardie compensation fund.

"I think it does set a precedent in that he was the first person to come back for further damages," she said.

"I've many more cases on the same lines. Bernie received a lot of publicity because of who he was, but there are hundreds of people diagnosed with mesothelioma every year."

Ms Tegelov described Mr Banton's second payout as "bittersweet".

"It was a relief to finish it in (Mr Banton's) lifetime and be able to get him the compensation in his lifetime. That was a relief for everybody," she said.

Mr Banton's family and legal team had prepared for a series of late-night and weekend tribunal hearings in order to finish the matter before he died.

"My husband is dying," Mrs Banton said outside the tribunal. "I'm just numb. I couldn't even say I'm happy.

"It was never about money and it's just a relief."

Mrs Banton's eyes were filled with tears as she spoke of "my Bernie" and his struggle for justice.

"I feel very privileged to be married to Bernie Banton and very honoured to be able to care for him in what is likely to be his final days," she said.