The contestants taking part in the new winter edition of the dating show were told the awful news yesterday, ahead of the final episode tonight.
With one couple be crowned winners, the show will include a moving memorial to Caroline, who sadly took her own life on Saturday February 15 at the age of 40.
They were allegedly told off-air and the footage will never be screened.
A source told the Mirror Online: "There will be a dedication to Caroline in tonight's final episode.
"The Islanders have been informed of the news of Caroline off camera ahead of the final."
Love Island's Iain Stirling, who is the voiceover for the show, paid tribute to Caroline in a moving moment on Monday's show.
As a video of cliffs and the sea was shown, the narrator said: "We are all absolutely devastated by the news that Caroline has passed away."
"Our thoughts are with her family and friends at this dreadful time.
"Caroline and me were together from the start of Love Island, and her passion, warmth, and infectious enthusiasm were a crucial part of what made the show connect with millions of viewers.
"Like many of you, right now we're all just trying to come to terms with what has happened.
"My only hope is that we are try and be kinder, always show love, and listen to one another.
"Caroline, I want to thank you for all the times we had making this show.
"You were a true friend to me. I'm gonna miss you, Caz."
For emotional support you can call the Samaritans 24-hour helpline on 116 123, email [email protected], visit a Samaritans branch in person or go to the Samaritans website.
Love Islands final episode airs tonight at 9pm on ITV2