Gundula Holbrook was the widow of British naval Commander Norman Holbrook, who had the Hume Highway town named in his honour after it was previously known as Germanton.

Commander Holbrook received a Victoria Cross for his valour as a World War I submariner in 1914, the same year Mrs Holbrook was born in Austria.

The couple wed in 1953 after Commander Holbrook's first wife Viva died the previous year.

Widowed since 1976, Mrs Holbrook in latter years had returned to her homeland from England and died in the village of Steinfeld at 10.30pm on New Year's Eve.

Greater Hume Shire mayor Heather Wilton yesterday paid tribute and said flags were being put at half mast to honour Mrs Holbrook.

"She was a marvellous person, a great benefactor to the people of Holbrook and the Shire of Holbrook and the Greater Hume council," Cr Wilton said.

Mrs Holbrook's greatest contribution was a $100,000 donation to have the giant HMAS Otway submarine rebuilt in the town to attract tourists.

She visited Holbrook many times, with her husband and alone.

In June 1997, Mrs Holbrook was a special guest at the formal commemoration of the HMAS Otway memorial and was granted honorary citizenship of Holbrook.

"I think this is the most important thing that has ever happened to me," Mrs Holbrook told The Border Mail.

"I don't feel like a visitor any more, now I am a resident."

The Holbrook Shire mayor at that time, Joan Parker, said yesterday Mrs Holbrook had a great affection for the community, recalling how she was once volunteering at the Woolpack Inn Museum when the widow came in and spent $200 on town souvenirs such as tea towels.

"She just loved Holbrook, she really embraced it," Mrs Parker said.

"I remember her telling me once she had more enthusiasm for Holbrook than her husband did."

Indeed Jane Waters, who worked for Mrs Holbrook as a cook for six months 40 years ago and then hosted her in the Riverina, said it was the Austrian's plea that convinced the commander to see his namesake town.

"He was embarrassed to have a town named after him and she said 'you need to get out there and show you're very appreciative' and he loved it when he came and she did too," Mrs Waters said yesterday.

In 1982, Mrs Holbrook presented her husband's war medals, including his VC, to the town and replicas are on show at the submarine museum and the originals on loan to the Australian War Memorial.

The couple had no offspring and Mrs Holbrook, an only child, was cremated.

Cr Wilton will formally acknowledge Mrs Holbrook next month in a mayoral minute at the council's first regular meeting for 2021.