Ruxton had been suffering from dementia and lapsed into a coma two days ago. He died yesterday at his Queensland nursing home with his son at his side.
Outspoken advocate Ruxton dead at 85
His close friend and head of the RSL in Victoria,David McLachlan,said the news was not unexpected.
''Bruce was a fearsome fighter for veterans and their entitlements and things that he considered to be right in the world,''Mr McLachlan said.
His greatest passions were veterans and Collingwood,Mr McLachlan said,adding he would be most proud of''being Australian and being a person that fought for what he believed in''.
Victorian Premier Ted Baillieu said Mr Ruxton was''an unassailable champion of our nation's veterans and our nation's values''.
A small service is planned for Mr Ruxton on the Sunshine Coast and a bigger memorial service for Melbourne. A state service would be discussed with his family but was yet to be confirmed,a government spokesman said.
State RSL head for 23 years,before moving to Queensland,he was equally well known for his controversial statements,which included calling Nobel peace prize recipient Archbishop Desmond Tutu''a witch doctor''in 1987.
The Melbourne High School graduate from Kew enlisted with the Australian Army in 1944 and served in World War II in the south-west Pacific area,the Netherlands,East Indies and Balikpapan in Borneo. For three years he served with the British Commonwealth Occupation Force in Japan.
In 1975 he received the MBE,the OBE in 1981,the AM in 1996,and in 1997 the Chevalier of Order of Merit.