The 88-year-old king's death after a long illness on Thursday afternoon has plunged the south-east Asian country of 64 million people into a period of intense mourning and uncertainty.

Thailand's military rulers, who seized power in a 2014 coup, are preparing for the king's only son Crown Prince Maha Vajiralongkorn​ to ascend to the throne.

Tens of thousands of Australians are holidaying in Thailand where the country's military government has declared a year-long period of mourning and banned any form of celebrations for 30 days.

Australia's smartraveller.gov.au advises that this is a time of "deep sorrow for the Thai people".

"You should abide by local laws and respect Thai customs at this time. Dress and behave appropriately," Australians were told.

"Be-aware there may be some disruption of normal commercial and public services in the country during the mourning period."

Western diplomats in Bangkok said tourists and expatriates in Thailand should wear black and respect the grief Thais will be feeling for their king, whose portrait hangs in every government building and in many shops and homes.

A government holiday was declared on Friday but the Stock Exchange, banks and businesses were trading as normal. The Thai baht strengthened on indications the king's death will pass calmly.

Despite an outpouring of grief, most services including transport and airports also appeared to be operating normally .

More troops and police were seen on the streets across the capital and others cities and towns but it appeared as though businesses, restaurants and bars would be able to trade as normal in most areas.

People lined streets where the king's body was to be taken Friday from the Siriraj hospital to the Grand Palace, where a funeral bathing ceremony was to begin, led by Crown Prince Vajiralongkorn at 5pm.

Hundreds of people gathered at the palace, where well wishers were allowed inside to make ceremonial offerings.

Hundreds of others slept on the streets so they would have spot to farewell their king.

Prime Minister Malcolm Turnbull expressed Australia's "deepest sorrow and sympathy" to the royal family and Thai people and praised the king as a major figure in modern Asian history who was held in the highest esteem in the region and internationally for his significant contribution to the development of his country.

Thai Prime Minister Prayuth Chan-ocha said the 63-year-old Crown Prince has acknowledged that he is the heir to the throne but he wanted to join the public in mourning his father's death before he becomes the 10th king of the Chakri Dynasty.

It could be several months before the Crown Prince's coronation as the new monarch.

The country's National Legislative Assembly has announced it will seek an audience with the Crown Prince to invite him to replace his father who succeeded to the throne on June 9, 1946, when he was a gangly, thick-spectacled American-born 18-year-old who could barely speak Thai.

During 70 years on the throne King Bhumibol presided over the revival of a faltering centuries-old royal institution, growing in power and influence as he helped direct Thailand's social and economic development.

Thais have flooded social media with digital prayers for the king, who some saw as semi-divine, while many went to temples to pray for him.

People in a crowd that had gathered at Bangkok's Siriraj hospital, where the king has been battling ailments for several years, openly wept as news of the death swept social media.

"Long live the King! Long live the King!" they cried, gazing up at the hospital building with tear-filled eyes.

Dozens of doctors wearing white coats solemnly sang the Thai national anthem in the hospital's foyer.

Four of the king's children, including the 63-year-old Crown Prince, were at the hospital when the king passed away peacefully, the palace said.

He had arrived on Wednesday from Germany where he owns a lakeside villa.

King Bhumibol had been treated for various ailments during a year-long hospitalisation in the Thai capital. He had not made a public appearance since January 2016.

Anxiety over his health and eventual succession had formed the backdrop to more than a decade of bitter political division in Thailand that has included military takeovers and sometimes violent street demonstrations.

A coup in May 2014 toppled the democratically-elected government of Thailand's first female prime minister, Yingluck Shinawatra.

King Bhumibol acceded to the throne after the mysterious shooting death of his brother, King Ananda Mahidol, at the Royal Palace in Bangkok on June 9, 1946.

Born in Cambridge, Massachusetts, where his father was studying, King Bhumibol, whose name means "Strength of the Land, Incomparable Power", was educated in Switzerland before returning to Thailand to be crowned on May 5, 1950, with a promise to the nation: "We shall reign with righteousness, for the benefit and happiness of the Siamese [Thai] people."

He had married Queen Sirikit - then a 17-year-old student - a week earlier, and they had four children, one son and three daughters.

The queen, who turned 84 in August 2016, has also suffered ailments and hospitalisation in recent times.

Like Britain's Prince Charles, the Crown Prince has waited year after year for the job. His birth on July 28, 1952, was the most significant male birth in the royal family for decades. His full name runs to almost 70 words and took more than a month to compose.

He was educated in Bangkok, London and Sydney and graduated from the Royal Military College, Duntroon, in the early 1970s.

He is an officer in the Thai military, a qualified military pilot and helicopter pilot and took an active part in military operations against the Communist Party of Thailand during the 1970s, also leading combat operations against a Vietnamese military incursion across the border from Cambodia.

The Crown Prince has married three times and fathered seven children, five sons and two daughters. In 1981 his mother Queen Sirikit said she had to be frank about him, whom she described as a "little bit of a Don Juan".

"He is a good student, a good boy but women find him interesting and he finds women even more interesting," she said. "So his family life is not smooth."

He once admitted in an interview in a Thai magazine that he knew he was seen as the family's "black sheep". He was the target in 1987 of a leaflet criticising his personal life.

His latest marriage was to commoner Srirasmi Suwadee​ on February 10, 2001.

Elevated to become Princess Srirasmi, she gave birth to a son, Dipangkorn Rasmijoti​, on April 29, 2005, the presumed heir to the throne after his father.

Two months later the baby was blessed in a holy water ceremony by the king and queen, confirming his acceptance into the royal family.

On December 12, 2014, the government's Royal Gazette said Princess Srirasmi "requested permission" from the Crown Prince to give up her title, days after at least six members of her family had been arrested for alleged involvement in corruption.

News about the royal family is tightly controlled in Thailand, where laws protecting the royals from insult make it a crime to defame, insult or threaten the king, queen, heir to the throne or regent.