UPDATE: FAMILY and friends of murdered woman Sarah Cafferkey have bid her farewell in a moving private funeral service.

Mourners packed the St Andrew's Uniting Church in Bacchus Marsh - many forced to stand on the grass outside - for a service at 2pm, the Herald Sun reports.

Ms Cafferkey's mum, Noelle Dickson, arrived with her daughter's beloved dog, Sprocket, leading the black Labrador into the church on a pink leash.

The pastor opened the service with a prayer and said even if the mourners knew why Ms Cafferkey had died, their pain would not be lessened.

The congregation, many wearing bright colours, including Sarah's favourite hue of pink, wiped away tears as they watched a photo slideshow of the 22-year-old, set to the song Feel So Close by Calvin Harris.

Then Ms Cafferkey's father Adrian gave a touching tribute to his daughter, firstly mentioning how she was christened in the same church that was now holding her funeral.

He said his daughter's family and friends felt a moral outrage at her death that was just a microcosm of the rage felt across Victoria.

"Today we are gathered to honour and celebrate a life ended too soon, the life of our treasured daughter, loved sister, cousin, very dear friend, Sez, Sarah, Scary Sarah, Sar Bear," Mr Cafferkey said.

"She is her mother's world, my little princess.

"Today you need only look around at this gathering to see the number of people that she reached in her short life.

"Sarah could raise your spirits with just a glance ... when Sarah walked in to your life it lit up, she radiated an energy that lifted your whole being."

Mr Cafferkey told a family story about the time his daughter caused the closure of Melbourne Airport when she was 12 because she heard men making jokes about terrorism attacks.

He said signs at the airport warning against terrorism jokes made the family smile each time they saw them.

Mr Cafferkey said his girl was a true giver and had always been there for people.

"She grappled at times with the challenges of her post teenage years and as many of us do she wondered what to do when she grew up," he said.

He said the family would focus on the joyous aspects of her life.

"She would want us to remember her for her best and at her best," he said.

"She would want us to make choices going forward that respect and honour her life.

"Goodbye our beautiful Sar Bear."

Read more at the Herald Sun.