This is a colloquial expression meaning that someone has died, Another expression also meaning this is:
He kicked the bucket.
met his maker
faced the final curtain
When someone has died and has been buried, an expression is:
He's pushing up daisies
Can other posters think of more expressions like these?; and of the type:
gone to that great (word to be chosen by speaker) in the sky.
NOTE: These idioms are flippant and should not be used when talking to a bereaved family.