Mr Ly died overnight, London time, at the National Hospital for Neurology after he was caught in the number 30 bus in Tavistock Square last Thursday.
He suffered serious head injuries in the attack and never regained consciousness.
Mr Ly had recently moved to London with his girlfriend to work in the city’s IT industry.
“This is a sad event and our hearts go out to Sam Ly’s family at this time,” said Australian Foreign Minister Alexander Downer.
British police have announced inquests into the deaths of 11 other identified blast victims.
They earlier released two images of alleged bus bomber Hasib Hussain, 18, including one from a closed-circuit TV camera that showed him toting a backpack.
Shehzad Tanweer, 22, has also been confirmed as responsible for bombing the Underground subway train at Aldgate, east London.
Police have for the first time verified that all four were suicide bombers – the first ever to strike in Britain.
British media reports have identified Mohammed Sidique Khan, 30, and Jamaican-born Briton Lindsey Germaine, 33, from Aylesbury, northwest of London, as the other two bombers.
An acquaintance of Sidique Khan has said he made annual trips to Afghanistan or Pakistan for military training.
Police are reportedly convinced that the men – none of whom have been previously linked with terrorism – were co-ordinated by a “mastermind” figure who equipped them with bombs and provided training and funds.
Meanwhile security forces in camouflage have searched the Beeston area of Leeds as police attempt to find out more about the network.
“We don’t know if there is a fifth man, or a sixth man, a seventh man or an eighth man,” said Metropolitan Police Commissioner Sir Ian Blair.
“Al-Qaeda clearly has the ability to provide training … to provide expertise… and I think that is what has occurred here,” he said.
FBI agents in Raleigh, North Carolina have joined the search for chemist Magdy Asi el-Nashar, a graduate of North Carolina State University who recently taught chemistry at Leeds University.
British newspaper The Times said detectives want to track him down, and he is thought to have rented one of the homes searched in Leeds earlier this week.
The newspaper said investigators believe a Pakistani Briton in his 30s with possible links to al-Qaeda may have orchestrated the attacks.
In London, police are calling on the public to provide information about Hussain and the young bombing suspect’s movements in the hour before the bus blast.
A CCTV image from Luton station showed him about two and a half hours before the blast, wearing jeans, a white shirt, a dark zip-up top and carrying a hefty backpack.