Russian President Vladimir Putin made the announcement Saturday afternoon to explain Gillard's absence as the Asia Pacific Economic Cooperation leaders met as a group for the first time at the summit.
"A sad event has occurred in the family of one of our colleagues, the prime minister of Australia. Her father has passed away," Putin said as the leaders gathered around a large round table. "Therefore I allow myself to express condolences from all of us."
Australia will be represented at the talks by its trade minister, Putin said.
Gillard arrived in the Pacific port city late Friday, but did not make a scheduled appearance Saturday morning at a meeting of business leaders taking place on the sidelines.
No comment was immediately available from Gillard or the Australian government.