Dobell was a very private man, known almost always as "Bill". He died on 13 May 1970 in the City of Lake Macquarie suburb of of hypertensive heart disease. The sole beneficiary of his estate was the Sir William Dobell Art Foundation, which was founded on 19 January 1971 and awards the Dobell Australian Drawing Biennial, which is named in his honour. He was cremated with Anglican rites and his ashes interred at Newcastle Memorial Park in Beresfield, New South Wales.