At the dictionary link I gave with my 1st comment, there are several possible translations listed for gönnen:
You may notice that most of the translations are in conjunction with ... for oneself. Others using these terms for a person tend to sound harsh. And in that context, and it would be inappropriate.
The remaining terms are to grant, and not to begrudge, where the latter also sounds inappropriate.
Thus the probably best translation is
We grant her the rest
as originally proposed by @Rudy Velthuis.
Though for me
Wir gönnen ihr die Ruhe
could have a bit of cynical or sarcastic connotation (maybe because that person wasn't ever able to be restful with whatever during their lifetime).
The usual (and respectful) formula would be
Möge Sie in Frieden ruhen.