Australia's oldest known contract killer, James Frederick Bazley, aged in his early 90s, spent his last years in a Melbourne nursing home after suffering ailing health.

It is understood he died on Thursday morning.

He is suspected of being paid $10,000 in a high profile Mafia plot to kill Mr Mackay, who was shot in the car park of the Griffith Hotel on July 15, 1977, before he disposed of the businessman's body.

Mr MacKay's assassination led to multiple inquiries and royal commissions, but his murder remains officially unsolved.

His body has never been found despite repeated searches for his remains, the last of which was in 2013 when an excavation took place at a property near the NSW town of Hay.

Mr Mackay, who had unsuccessfully run as the Liberal candidate against Labor's Al Grassby for the seat of Riverina in 1974, was causing trouble for Mafia boss Tony Sergi and his associates by complaining about the police turning a blind eye to the growing drug trade in the district.

It's believed he was murdered for his efforts to expose the marijuana trade and the Griffith-based Mafia families behind the drug’s trade.

In 1986, Bazley was sentenced to life in prison over the double murder of drug couriers Isabel and Douglas Wilson, whose bodies were found buried in Rye in May 1979.

He was also told to kill the Wilsons' dog, Taj.

But, as a dog lover and former poodle breeder, he refused. The dog was later found wandering in a Brunswick street.

He was also sentenced to nine years in jail for conspiracy to murder Mr Mackay and a further four years for a $270,000 armed robbery.

The Supreme Court later set his minimum sentence at 15 years.

Bazley walked free from a prison in 2001.

Bazley was a Painters and Dockers gunman in the 1970s, and was shot twice during the notorious dockers war.

He rejected repeated attempts by New South Wales and Victorian detectives to reveal where Mr Mackay’s remains were buried.

In his later years, Bazley was still often seen in the company of Melbourne characters usually called ''colourful Carlton identities''.

While he had a 50-year history of armed robbery and violence, prison officers said he was a model inmate and well-respected by his fellow prisoners.

He lived most of his days out in Carlton North with his wife Lillian before he moved into a Melbourne nursing home.

A funeral is expected to be held for him next week.

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