Ledger died before The Dark Knight was released in cinemas
Heath Ledger's family say they are "proud and excited" about the actor's posthumous Oscar nomination.
Ledger died of an accidental drug overdose exactly one year before being shortlisted for best supporting actor for The Dark Knight.
Speaking in Perth, western Australia, his sister Ashleigh Bell said playing the Joker was "the most fun he ever had working on a film".
She said: "In Heath's words, he had the time of his life."
"We will take this opportunity today to honour his wonderful life and take comfort in knowing Heath will continue to touch future generations through this amazing artform," she added.
Heath Ledger's sisters remember their brother on the anniversary of his death
Ledger, who won a Golden Globe for his portrayal of Batman's arch-enemy, has been included in a shortlist which includes Josh Brolin, Robert Downey and past Oscar winner Philip Seymour Hoffman.
If Ledger wins, it will be the second posthumous Academy Award to be handed out to an actor, after Peter Finch's honour for Network in 1977.
Ledger was found dead on 22 January 2008 in his Manhattan apartment with a bottle of prescription sleeping pills nearby.
An inquest found he died of an accidental overdose of prescription drugs that included painkillers, sleeping pills and anti-anxiety medication.
Ledger's sister Kate said: "It seems like merely yesterday. We are still all nursing broken heart."
Elsewhere, more reactions are coming in from Ledger's fellow Oscar nominees.
Leading the British charge is Slumdog Millionaire with 10 nominations.
The film's director Danny Boyle said: "I'm ecstatic! Thank you to the Academy from the cast and crew.
Winslet has also been nominated for two Baftas
"It feels like you've given us a billion nominations!"
Kate Winslet - enjoying her sixth nomination for an Oscar as a concentration camp guard in The Reader - said: "I'm extremely happy to have been nominated. And very fortunate. Playing Hanna Schmitz will always remain one of the biggest challenges I've ever been blessed with."
The Curious Case of Benjamin Button is the frontrunner with 13 nominations, including best actor for Brad Pitt. He said: "It's great fun for the movie to see it get acknowledged that way, but it's not the goal.
"It's a fickle business, and there to be enjoyed if you're invited and there to be enjoyed if you're not."
The 81st Academy Awards ceremony will take place in Los Angeles on 22 February.
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