Digby, who illustrated the children's fiction series Bottersnikes and Gumbles and the acclaimed picture book Waltzing Matilda, passed away on Friday night after being in hospital for about a month.

Known for his infectious sense of humour and his love of telephone conversations, Digby was close friends with novelist Patrick White and the two were renowned for their passion for gossiping.

Digby's agent Barbara Mobbs described him as a caring and fun man, who had left behind a legacy of beautiful friendships, books and operas.

"He had been in hospital for just over a month and he didn't have a lot of energy. He was 82 and I knew when he had lost interest in the telephone, chocolates and prawns that he really was not long for this world," Ms Mobbs said.

After growing up in New Zealand and studying at the Slade School of Fine Art in London, Digby moved to Australia in 1959.

He was an esteemed costume and set designer, working on productions for Opera Australia, The Australian Ballet and The Elizabethan Trust Opera.

"He was a remarkable man, he was sophisticated and eccentric and whimsical and deeply caring," Opera Australia former artistic director and close friend Moffatt Oxenbould said.

"He was always quite a hard task master on himself. He would take a long time to do things. He would do something fine, and then do it all over again."

For many book readers, Digby will be most well known for illustrating Sam Wakefield's children's series Bottersnikes and Gumbles, which was published between 1967 and 1989.

An animated television show based on the books is slated for release at the start of 2016 with Netflix, the BBC and Seven Network involved in the project.

Director Darren Price said Digby had been pleased with the animated version of the characters and had given the production team many laughs.

"He was really supportive and he wrote really hilarious letters to us. We would send him images of the show and when we sent him a Bottersnike he drew lipstick and tiara and pearl earrings on it and sent it back with a funny letter," Mr Price said.

Digby also brought the swagman to life in an illustrated version of A.B Paterson's Waltzing Matilda, published in 1970. The book won the Children's Book Council of Australia's Picture Book of the Year award and the Critici in Erba Prize for illustration.

As well as a nose for theatre design and illustration, he was an accomplished painter and designed book covers for White's novels.

Australian writer Helen Garner, a friend of Digby's, described him as: "the sweetest and funniest man in the world".

Digby had lived in Kirribilli but moved to Scotts Head on the state's mid north coast in the 1980s with his partner, the late Woollahra librarian James Allison.

He enjoyed being part of the small community and spent the later years of his life reading – and of course keeping up with the telephone conversations.

"His head was always together and he was always looking to pass on things that were important to other people, that was his fun," Ms Mobbs said.

"You always knew you would have a laugh as soon as you picked up your phone to Desmond."