Lewis, as he was named by rescuers, was saved from the flames by brave Toni Doherty who rushed into the burning bush in Long Flat, NSW, last week to reach him.
Taking off her shirt, she wrapped badly burned Lewis in it and doused him in water as he yelped in pain.
Lewis was taken to the Koala Hospital in Port Macquarie, but today it was announced he had passed away.
In the moving post, staff said they had made the 'difficult decision' to put Lewis to sleep to end his suffering after assessing his injuries and concluding he would never recover.
They added, 'We recently posted that "burns injuries can get worse before they get better." In Ellenborough Lewis's case, the burns did get worse, and unfortunately would not have gotten better.
'The Koala Hospital's number one goal is animal welfare, so it was on those grounds that this decision was made.'
Footage of Ms Doherty rescuing Lewis went viral and highlighted the horrendous condition koalas faced as bushfires swept Australia.
Ms Doherty visited Lewis in hospital, and he was named after her grandson.