According to the News Agency of Nigeria (NAN), she reportedly died of heart attack in Canada, where she gave birth to a baby girl in March..
The baby was her second child.
Her first daughter is 18-years-old.
Olaiya who had featured in many Yoruba and English movies married her second husband last year after the first one crashed in 2008.
She has won various awards in the industry including Best New Actress Award.
The 42-year-old actress was the daughter of high life music legend, Victor Olaiya. She was born in February 1975.
However, colleagues of the late actress have taken social media to express their shock at the news of her death.