Details, including a date, for the funeral are yet to be finalised.
Peter Brock's former wife, Bev Brock, who split with the racing legend in May last year after 28 years together, said the decision to accept the state funeral was made by the couple's three children.
"I believe it's my kids choice and they felt it was fitting," Mrs Brock told ABC Radio.
"Their dad was loved. He was in the public eye, and everything had to be done with a flourish and with a bang.
"It's probably the way he would want to go out, (and) he would want to be remembered."
A state government spokeswoman said the Brock family had yet to contact the government to accept the offer.
She said details of the funeral would be finalised with the family.
"It's a fantastic offer and so many people want to say goodbye to him," Mrs Brock said.
Brock's children are believed to be on their way to Perth.
Brock was killed on Friday when his car smashed into a tree during the Targa West rally in Western Australia.