The Senate is set to vote down proposed changes to coastal shipping laws which would have deregulated the industry and paved the way for foreign ships to spend more time in Australian waters.

The Shipping Legislation Amendment Bill would have allowed foreign-flagged ships working between Australian ports for more than six months per year to pay foreign wages.

The ABC understands Victorian senator John Madigan will vote against the amendments, together with crossbench colleagues Jacqui Lambie and Glenn Lazarus.

Current laws require anyone wanting to ship freight to first seek out Australian vessels. Where foreign ships are used, the company must ensure they pay Australian wages.

Labor and the Greens had lobbied hard against the reforms, saying they would have left local shipping workers at risk of losing jobs to cheaper overseas crews.

The upcoming vote follows a recent admission by Government officials that they suggested an Australian cruise operator could replace local staff with foreigners to survive under the changed laws.

The Government needed the support of six of the eight Senate crossbenchers in order to pass its amendments.

Federal Infrastructure Minister Warren Truss had argued the reforms would have reduced freight costs for Australian businesses, and made it cheaper to ship commodities such as sugar and cement between domestic ports.