Ivan Milat's dying wish for the state of New South Wales to pay for his funeral has been denied, with his "unceremonious" cremation paid for out of his prison account.

Australia's worst serial killer died in Long Bay jail hospital on October 27 of oesophageal and stomach cancer after leaving a letter with his family requesting the NSW Government pay his funeral costs.

The backpacker murderer was not granted that request, NSW Corrections Minister Anthony Roberts said on Sunday.

"Ivan Milat caused immeasurable pain and suffering to his victims and their families," Mr Roberts said in a statement.

"He stole hundreds of years away from young, innocent lives.

"His corpse has now been unceremoniously incinerated and he will pay for it.

"It has already been arranged for the full reimbursement of costs to be paid from his prison account.

"His last wish has been emphatically denied and he can now rot in hell where he belongs."

Milat was arrested in 1994 following one of the biggest police investigations in Australian history, after seven bodies were discovered in shallow graves in the Belanglo State Forest, south-west of Sydney, between 1992 and 1993.

His victims were all hitchhikers who disappeared between 1989 and 1992 while travelling south along the Hume Highway near Liverpool in western Sydney.

They were Deborah Everist and James Gibson, both 19, from Victoria, Simone Schmidl, 21, from Germany, Anja Habschied, 20, and Gabor Neugebauer, 21, a couple also from Germany, and Caroline Clarke, 21, and Joanne Walters, 22, from Britain.

Ivan Milat's dying request refused_1
Inset: Milat spent his final days in Sydney's Long Bay jail hospital. Photo: ABC

Two of the victims had been shot multiple times in the head, as if used for target practice. One had been decapitated. Three had stab wounds that would have caused paralysis and two of those victims had their spinal cords completely severed.

Court documents state that all but one of the victims had been subjected to "sexual interference, either before or after death".

Milat, who was convicted in 1996, never admitted to the murders.

– ABC