The premier of Australia's Victoria state resigned on Tuesday, making way for a new leader for her centre-left Labor Party ahead of a November election that is being widely watched as a test of the right-wing One Nation party's popularity.

Premier Jacinta Allan has led Victoria, the country's second-most populous state and home to Melbourne, since 2023, but has seen her approval ratings steadily decline amid a weak economy and as voters tire of Labor which has been in power for 12 years.

Most polls conducted before her resignation predicted the centre-right Liberal Party would take power in November, though some show the party may be reliant on One Nation to form government.

"That remains the biggest risk at this election: a One Nation-Liberal coalition government," Allan told a news conference.

State lawmakers in the party are expected to elect a new leader as early as this week.