Nguyen was moved to Jakarta last year on the request of his family to get access to better treatment for his cancer.
A spokeswoman for the Department of Foreign Affairs and Trade confirmed on Tuesday night that they were providing support to the family of an Australian man who died in Indonesia from a "terminal illness".
He had been arrested at the Melasti Hotel in the seedy tourist hot spot of Kuta in April 2005 alongside three other "drug mules" and Myuran Sukumaran — who would later be named a ringleader in the smuggling plot.
Sukumaran and the Melasti Three, as Nguyen, Matthew Norman and Si Yi Chen came to be called during their trial, were caught with about 300 grams of heroin, Indonesian police alleged.
Originally sentenced to death in 2006, Nguyen and other mules narrowly escaped execution after their sentences were commuted to life in prison two years later.
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Nguyen is the third member of the Bali Nine to die after Andrew Chan and Sukumaran were executed by firing squad in 2015.
Renae Lawrence has been the only Bali Nine member to have her jail time cut after receiving a reduction on her 20-year sentence in 2017.
with AAP