The British singer performed his song The A-Team in honour of the late Aussie in front of a 100,000-strong crowd at the MCG, days before the first anniversary of the 52-year-old's death on March 4.
"Being in the MCG tonight and not having my friend Shane Warne here to watch this ... I know this venue was really, really special to him," Sheeran told the crowd before then dedicating the song to "Shane and his kids".
Warne's children Brooke, Jackson and Summer were all in the crowd for the concert, with daughter Brooke posting the song to her Instagram, saying, "Love you Ed and miss you Dad."