On 9 December 1916 Penny was working on his property in the morning but when in the afternoon he felt ill and took a rest on his veranda. Shortly afterwards he had a violent vomiting attack and the doctor was called. After a short period of stabilisation, Penny died soon after. The official reports were that the death was caused by Shock, Cardiac syncope (fainting due to low blood pressure) and internal ruptures. The sad news of Penny's passing swept far and wide and was reported in the local area, the region and even interstate. Edwin Penny was buried at Cheltenham Cemetery on Monday 11 December 1916 after a brief service at his beloved Church of Christ where he was due to preach the day following his death. The service at the graveside was curtailed due to foul weather but regardless was very largely attended. A memorial service was subsequently held at the Church. The pall bearers for the coffin was a who's who of the region with names such as Allnutt, LePage, Laver, Brownfield, Butler, Marriott and Davie and the Coffin Bearers were Wolf, Barnett, Daff, Hayes, Simpson and Bodsworth. Edwin Penny was interred with his first wife Sarah Ann and their second son Percival Thomas and later in 1937 his second wife Emily Maria was also interred with them. They can be found at the Cheltenham Memorial Cemetery in the Church of Christ Section of the Cemetery in Section A Grave 72.