The Greens have won their third Victorian lower house seat, defeating Labor in Northcote, a seat the ALP has held for almost a century.

Key points: Lidia Thorpe will become the first Aboriginal woman in Victoria's Parliament, defeating Labor's Clare Burns

Lidia Thorpe will become the first Aboriginal woman in Victoria's Parliament, defeating Labor's Clare Burns It is the first time Labor has lost a Victorian by-election since 1948

It is the first time Labor has lost a Victorian by-election since 1948 Only 78 per cent of people voted in the by-election at the close of polls, the electoral commission said

ABC election analyst Antony Green called the win for the Greens just before 8:30pm AEDT.

The by-election in the inner-city seat was triggered by the death in August of Labor minister Fiona Richardson, who had been diagnosed with multiple tumours.

Labor won Northcote in 2014 with a 6 per cent swing.

The Greens' Lidia Thorpe will become the first Aboriginal woman in Victoria's Parliament, defeating Labor's Clare Burns on the back of a campaign that included a pitch to voters that they could make history while not toppling a progressive government.

It is the first time Labor has lost a Victorian by-election since 1948.

Labor's Clare Burns makes a speech after the Greens declare victory in Northcote. ( ABC News: Danielle Bonica )

Labor sources were quick to point out on Saturday night that despite its best campaign efforts, demographic changes in the area and soaring house prices made the appeal of the Greens too big.

The defeat will likely see Labor focus more on suburban and regional seats over the next 12 months leading up to the November 2018 election.

Only 78 per cent of people had voted in the by-election at the close of polls on Saturday, the electoral commission said.

Labor had been worried a low voter turnout could hurt their prospects.

With preferences set to be decisive, Labor did a deal with the Liberal Democrats and the Animal Justice Party.

Labor had campaigned hard in the seat it has held for 90 years, spending $500,000 and utilising an army of volunteers.

Ms Thorpe campaigned on more localised issues, including a plan to cap rent hikes, and public transport overcrowding.

The Greens also focused on the party's wider environmental policies such as the creation of the Great Forest National park in the central highlands above Healesville.

"People do care about the Great Forest National Park," Ms Thorpe said after her victory.

'Tonight is just the beginning,' Greens leader says

After her win, Ms Thorpe, who only joined the Greens last year, paid tribute to the late Ms Richardson and thanked all the Greens volunteers and campaigners.

Victorian Greens leader Samantha Ratnam said the victory showed voters cared about climate change action, and a stop to public housing sell offs.

"Tonight is just the beginning," Ms Ratnam said.

She said the Greens would now focus on winning Richmond and Brunswick at next year's election.

"All I can say is [Federal Labor MP for Batman] David Feeney — watch out."