The 73-year-old reportedly had part of his jaw removed followed by reconstructive surgery after having the tumour removed.
Farnham's wife Jill and sons Rob and James said the singer was in a stable condition.
"John has been through an eleven and a half hour surgery in Melbourne yesterday and is now in a stable condition in ICU," Jill said a statement on Wednesday.
"The cancer tumour was located in his mouth and it has been successfully removed.
"There is still a long road of recovery and healing ahead of us, but we know John is up for that task."
The family paid tribute to hospital staff and thanked the public for their well wishes.
"We are in awe of the incredible teams of healthcare professionals who have guided us through this very challenging time with such compassion," they said.
"To all the surgeons, doctors, nurses and consultants - thank you one and all so very much."
The singer's operation began at 8am on Tuesday in a Melbourne hospital and was completed at 7.30pm that night.
Seven Network entertainment reporter Peter Ford said Farnham underwent two procedures.
"The first was the removal of the tumour from his mouth," Ford said on The Morning Show.
"After that was completed, the reconstructive team came in to take over and there was reconstructive surgery because part of John's jaw had to be removed as part of tackling this."
Before his surgery, Farnham said a cancer diagnosis was something many people faced each day "and countless others have walked this path before me".
"The one thing I know for sure is that we have the very best specialist health care professionals in Victoria and we can all be grateful for that. I know I am," he said.
Mouth cancer is a type of head and neck cancer, and more than 5100 people are diagnosed with head and neck cancer in Australia each year, experts say.
That includes three people diagnosed with mouth cancer every day, with head and neck cancers three times more common in men, Head and Neck Cancer Australia says.
Men make up about 70 per cent of the people diagnosed each year, with tobacco and alcohol use responsible for more than three quarters of cases.
Treatment can take away patients' basic abilities like eating, breathing, speaking, drinking, and swallowing, the organisation says, and recovery can be long.
Farnham's diagnosis comes three years after he suffered a health scare and was hospitalised with a severe kidney infection.
He sang his way into Australian hearts as a fresh-faced teenager in the 1960s, but faded into near-obscurity before his 1986 album Whispering Jack shot him back to the top some 20 years later.
The album produced one of the nation's best-known anthems, You're the Voice, and propelled Farnham to hero status.
He followed up Whispering Jack with his chart-topping albums Age of Reason (1988) and Chain Reaction (1990).
Farnham was born in 1949 in Dagenham, England. He emigrated to Australia aged 10 with his family, who settled in Melbourne.
News of Farnham's cancer diagnosis prompted an outpouring of well wishes across the country.
Prime Minister Anthony Albanese and Victorian Premier Daniel Andrews both wished Farnham and his family well on Tuesday.
"John Farnham has been and continues to be a great Australian," Mr Albanese said.
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