John Cain, Victoria's longest-serving Labor premier, has died aged 88.

Mr Cain had suffered a severe stroke on December 10 and was being treated at the Royal Melbourne Hospital.

In a statement, his family said: "It is with great sadness that we advise that John Cain passed away overnight."

"We are grateful John enjoyed good health and remained very active prior to his stroke.

"He is much-loved and admired by his family and will be greatly missed."

Born at the height of the Great Depression in 1931, Mr Cain rose through the ranks of the Victorian Labor Party to become the state's 41st premier in 1982.

John Cain served as Victorian premier from 1982-1990. ( AAP: Julian Smith )

An admired leader whose popularity suffered as the economy did

His election ended 27 years of conservative rule and he was hugely popular throughout most of his first two terms.

During this period, his government propped up the massive Alcoa aluminium plant at Portland, a symbol of the state's economic renewal.

He imposed a ban on poker machines and casinos, legalised brothels, and oversaw an expansion of Victoria's national parks.

But in 1987 the stock market crashed, and while Labor was narrowly re-elected the following year, the state's economy nosedived, along with the premier's popularity.

The collapse of the Pyramid Building Society and the Tri-Continental Bank amid rising debt, and protests on the streets of Melbourne, raised questions about Mr Cain's future.

A think tank was established in John Cain's name to promote progressive policy research. ( Facebook: John Cain Foundation )

Mr Cain was adamant he would continue to lead Labor, but he resigned as premier in 1990 after he failed to achieve party support for a package of spending cuts and tax increases.

Joan Kirner was then left to lead a party divided and was installed as the state's first female leader.

"We were not united. I had no authority left," he later said of the leadership change.

"It was very clear to me the party wanted me out and somebody else might be able to pull it together and that's what she sought to do."

Loading

Loading

Loading

Loading

Loading

'An absolute straight shooter'

Victorian Premier Daniel Andrews said the "Labor legend" sought him out on the eve of the 2014 election because he believed Labor would win.

Mr Andrews said his advice was direct — celebrate for "a bare moment" then get back to work.

"He sought me out for a moment that I will never ever forget," Mr Andrews said.

"A Labor legend, an icon, someone who has made Victoria fairer and stronger.

"Someone who lived his life in full accordance with his values and someone who will be missed. Deeply, deeply missed."

A statue of John Cain stands in Treasury Gardens, next to the Victorian Parliament. ( ABC News: Scott Jewell )

Former premier John Brumby first met Mr Cain when he ran for State Parliament in 1979.

He said Mr Cain taught him respect on the campaign trail when meeting voters.

"He was a respectful and courteous man,'' Mr Brumby said.

"Character-wise you couldn't fault John, he was an absolute straight shooter.

"For most of his years he ran a flawless government."

Mr Brumby said Mr Cain was a major reformer who lifted up Victoria with leadership on social issues, tobacco advertising and road safety.

In more recent times he took a swipe at Victoria's fixed four-year parliamentary term introduced by the Bracks Labor government, labelling it a "legislative mess".

Mr Cain also sat on the board of the MCG Trust and was a patron of the Epilepsy Foundation of Victoria.

His father, who had the same name, also served as premier three times between 1943 and 1955.

Loading

Loading

Loading

John Cain grieved for 'the decline of the thinking society'

Mr Cain was still socially active up until he suffered the stroke, making a number of appearances in December.

He participated in the the farewell program for outgoing ABC Radio Melbourne broadcaster Jon Faine in October.

Speaking as part of a panel of former premiers, Mr Cain decried what he saw as "the decline of the thinking society", and said today's political parties were failing to do the policy work that was needed.

"Policy work is the public duty of all of us and … the Westminster system works best when … the political parties accept the responsibility to shape and frame it and they're not [doing it] now," he said.

John Cain appeared with current and former Victorian premiers during an event at the State Library's Ian Potter Queen's Hall in December. ( Twitter: Virginia Trioli )

Faine asked Mr Cain to comment on a story that he always kept a packet of stamps in his office desk so any personal correspondence did not have to go through the office mail.

"I regarded my personal issues as being separated from the public issues I was pursuing," he said.

"Your public duty should be separate from your personal interest. That was absent when we came to power in the early '80s."

A woman places a flower onto John Cain's statue outside Treasury Gardens. ( AAP: James Ross )

Mr Cain also attended the gala opening of the refurbished Ian Potter Queen's Hall at the State Library of Victoria on December 3 alongside former Labor premier Steve Bracks.

"I can still remember the photo that was taken of all the premiers who'd made a contribution to that library at the time," Mr Bracks said.

"John was erudite, he was smart, he was intellectually bright as he always was, he looked fit and healthy.

"He's a great figure in Victoria, a great premier, a great Labor leader and he'll be sorely missed."

Victorian Opposition Leader Michael O'Brien said Mr Cain was a formidable campaigner and "unfailingly polite", with a keenly inquiring mind.

"Mr Cain played an important role in modernising the Victorian Labor Party and maintained a statesmanlike dignity in his nearly 30 years of political retirement," he said.

Mr Cain is survived by his wife Nancye and their three children, Joanne Crothers, Victoria's State Coroner Judge John Cain and James Cain.

A state memorial service will be held in the new year.

Loading

Loading

Loading

Loading

Loading