Around the country, people laid flowers and signed condolence books after hearing the seven-decade reign of the Queen had ended following her death aged 96 in the early hours of Friday morning.
To mark her passing, Australia's Federation Guard fired a Gun Salute from the forecourt of Parliament House, using six Howitzer Ceremonial Guns firing one round for each year of the Queen's life at 10-second intervals.
Under constitutional law, King Charles III immediately became king when his mother died in Scotland.
Flags flew at half-mast across Australia and while the country is not expected to observe an official mourning period, a national memorial is expected.
Mr Albanese and Governor-General David Hurley are expected to travel to London for the Queen's funeral, the date for which is still to be confirmed.
Condolence books were made available for Australians to sign in various states and territories.
"The Queen died peacefully at Balmoral," Buckingham Palace said in its official statement.
Mr Albanese paid tribute to the Queen.
"An historic reign and a long life devoted to duty, family, faith and service has come to an end," he said.
"The government and the people of Australia offer our deepest condolences to the royal family, who are grieving for a beloved mother, grandmother and great-grandmother - the person whom for so long was their greatest inner strength."
Mr Albanese said that "from her famous first trip to Australia, the only reigning sovereign to ever visit, it was clear Her Majesty held a special place in her heart for Australia".
Elizabeth Alexandra Mary Windsor had been queen of the United Kingdom and 14 Commonwealth realms, including Australia, since her reign began in February 1952.
Mr Hurley said Australians should take inspiration from the Queen's dedication and service.
"She was a truly remarkable person," he said in a statement.
"When I reflect on my own memories – she was my Queen for my whole life – I think of Her Majesty's dignity and her compassion. Her dedication and tireless work ethic. And her selflessness and unwavering commitment to the people that she served. To us."
Opposition leader Peter Dutton said the Queen brought a stabilising force to the world.
"She has been such a significant part of our lives and the stability of our country, of our system of democracy – not just here – but around the world," he said.
Former prime minister Paul Keating said her public service was a "lesson in dedication".
"Her exceptionally long, dedicated reign is unlikely to be repeated; not only in Britain but in the world generally."
Former prime minister John Howard said he would look back on his meetings with the Queen during his years in power with great affection.
"She had what seemed to me to be a deep curiosity about Australia. She understood different features of Australian life," he said.
Acting Primate of the Anglican Church of Australia, Archbishop Philip Freier, said the Queen was much admired and respected by millions of people across the nation.
"As a frequent visitor to Australia the Queen had a special place in the hearts of Australians and she leaves behind a truly extraordinary legacy, having touched the lives of so many," he said.
The Queen's death has already reignited Australia's republic debate.
Australian Greens Leader Adam Bandt tweeted his respects to the royal family but added "Australia must move forward".
"We need treaty with First Nations people, and we need to become a republic," he wrote.
Australian Republican Movement chair Peter FitzSimons expressed sadness over the Queen's death.
"It is unlikely we will ever see a monarch as respected or admired by the Australian people again," he said in a statement on Friday.
Monarchists said King Charles has been training his entire life for the role.
"Australians can take comfort in the knowledge that their new king will unequivocally continue the longstanding traditions, dutiful service and vital constitutional role which epitomised our late Queen," Australian Monarchist League chair Philip Benwell said.
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