The kelpie, called Maggie, was found dead by her owner Brian McLaren earlier this week on his farm, near the rural town of Warrnambool.
"She was 30 years old, she was still going along nicely last week, she was walking from the dairy to the office and growling at the cats and all that sort of thing," Xinhua news agency quoted McLaren as saying.
"She just went downhill in two days and I said yesterday (Tuesday) morning when I went home for lunch ... She hasn't got long now."
"I'm sad, but I'm pleased she went the way she went."
Last year, Maggie shot to worldwide fame when the farm dog featured in a newspaper report claiming she was "oldest pooch in the world".
If Maggie was indeed 30 years old, the Kelpie would have been nearing her third century in dog years -- where each human year is worth seven for man's best friend.
Maggie's age cannot be verified as McLaren lost the dog's paperwork when she was a puppy.
However, McLaren said he brought Maggie back to the family farm when his youngest son, Liam, was just four. He is now 34 years old, meaning the extraordinary dog was at least 30.
"We were great mates, it is a bit sad," said McLaren, who has already buried Maggie.
Maggie, who was deaf but had not been for a vet check for 15 years, was still working as the farm's guard dog in her later years.
The Victorian Kelpie was almost killed in October last year when a utility vehicle ran over her while she slept on the road. But she lived to tell the tale.
Most dogs live between eight and 15 years. Records of dogs living more than 20 years are extremely rare and usually involve smaller breeds.
Australia already holds the official Guinness World Record for the world's oldest dog, with a cattle dog called Bluey living for 29 years from 1910 to 1939.