The world champ died surrounded by friends and family in Victoria, just one week after announcing he had stopped treatment.
The 36-year-old is survived by his wife Briony, and daughters Lusi, 6, and Jemma, 2.
A statement from the family reads, 'It breaks my heart to tell everyone that Jarrod is no longer with us.'
'He passed away peacefully at 8.20pm last night, having spent his final week in Torquay among his family and close friends.
'Lusi, Jemma and I are filled with grief and now must confront our lives without the greatest husband and father we could ever have wished for.
'At the same time, we have been blessed and overwhelmed with the messages and actions of support from around the world and feel comforted that Jarrod was able to happily impact so many people throughout his life. Our humble thanks to you all.'
Just last week, The Lyle family revealed in a gut wrenching Instagram post that the golfer would be stopping treatment to spend his final days near his daughters.
The caption read: 'This will be the final post on Jarrod’s page.
'Earlier today we started palliative care for him as his body is no longer able to fight.
We will take him closer to home to be near his girls. He has put up a courageous fight and he is surrounded by love.'
The hashtag 'f**k cancer' finished the post.
Lyle was first diagnosed with acute myeloid leukaemia at 17-years-old. He beat cancer twice in 1998 and 2012.
In July 2017, Lyle's cancer returned for the third time, forcing him to quit the PGA tour and Web.com tour.
Wife Briony wrote a touching post on his Facebook page on Tuesday night, advising the public he had 'stopped active treatment'.
'My heart breaks as I type this message. Earlier today Jarrod made the decision to stop active treatment and begin palliative care,' she said.
'He has given everything that he’s got to give, and his poor body cannot take anymore.
'Jarrod knows he is loved, and the thousands of prayers and well wishes that have been sent his way have kept him going through some incredibly tough times.
'But he has reached his limit, and the docs have finally agreed that they can no longer strive for a positive outcome.'
Jarrod and Briony share two beautiful daughters.
Our thoughts are with Lye's friends and family.
This article originally appeared on New Idea.