In a statement, his family indicated such a funeral was appropriate because it is "recognizing the impact (Hillary) has on all New Zealanders." Hillary died of a heart attack Friday, New Zealand time, in Auckland. He was 88.
"I have just heard they have accepted the offer of a state funeral," a spokesman for acting Prime Minister Michael Cullen told the New Zealand Herald.
A date for the funeral would probably be determined during the weekend.
Hillary died in an Auckland hospital, where he was admitted Monday, his wife, June, said in the statement.
"He remained in good spirits until the end," she said.
Governor-General Anand Satyanand said Hillary's death was a great loss to his family and to all New Zealanders. "Sir Edmund was a great New Zealander and his passing will be deeply mourned by people throughout the world," Satyandand said.
The one-time beekeeper shot to fame in 1953 when he and Sherpa Tenzing Norgay, his guide, reached the summit of Mount Everest.