Released in 2007, I Am Legend follows the story of Robert Neville (and his German shepherd, Sam) as he tries to survive a viral outbreak, that has wiped out most of humanity, while working on a cure.
Spoilers below.

Short answer
Yes, the dog dies.
Detailed answer
Robert and his dog, Samantha (a german shepherd), fight off a number of infected dogs. During this fight, Sam is bitten and infected. As the infection progresses, she is shown to be in distress. You can briefly hear her whimper.
As Sam succumbs to the virus, she attempts to attack Robert who strangles her to death. While the camera is focused on Robert's face, you know what he's doing and you can hear Sam struggling to survive.
The back of Sam's corpse can be seen as the camera zooms out as the scene ends.
This scene is often ranked by audiences as amongst the saddest/most difficult animal deaths in the movies.
The alternate ending
There is an alternate ending to I Am Legend. However, Sam's death scene is unaffected by this, and remains intact regardless of which version of the film you choose to watch.
What is I Am Legend
Loosely based on the 1954 novel of the same name, I Am Legend is a 2007 film, directed by Francis Lawrence and starring Will Smith. Smith plays Robert Neville, the sole human survivor following a virus outbreak as he attempts to survive a dangerous new world.
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