Labor is set to challenge the Liberal Party's likely victory in the marginal Melbourne electorate of Chisholm, after allegations of dirty tactics and misleading campaign material in the crucial multicultural seat.

Key points: It is understood Labor will allege election information sent via WeChat was designed to confuse

It is understood Labor will allege election information sent via WeChat was designed to confuse Any challenge will also reference Liberal posters in Chinese that allegedly "mimic" AEC branding

Any challenge will also reference Liberal posters in Chinese that allegedly "mimic" AEC branding If a Labor challenge is successful, it could trigger a by-election in Chisholm

The Coalition is set to hold the electorate after a battle between two Chinese-Australian candidates — Labor's Jennifer Yang and the Liberals' Gladys Liu, who is set to be the first Chinese-Australian woman in the House of Representatives.

The ABC understands Labor's legal challenge to the Court of Disputed Returns will focus on how-to-vote information posted on her account on Chinese social media platform WeChat, telling locals to vote "1" for Ms Liu.

The message told voters to "copy exactly as it is to avoid an informal vote", suggesting any other preferencing would result in an invalid ballot.

Gladys Liu posted the how-to-vote card on her WeChat moments. ( Screen grab of Gladys Liu's WeChat )

It is understood the allegation will be that such material was designed to confuse voters into voting for the Liberals.

Ms Liu denied authorising the material, but the ABC recorded information showing she posted the how-to-vote card under her own WeChat account at the end of April.

The ABC cannot confirm whether the cards were handed out at pre-polling stations or at polling booths on election day, and Ms Liu had other Chinese material at those sites.

A spokesperson from the Liberal Party's Victorian Division told the ABC in a statement that the Liberal Party is not aware of any such action being taken by the Labor Party.

"Should that change, the Party will respond as appropriate," the spokesperson said.

Any challenge would also include a reference to Liberal posters, in Chinese, posted at polling stations telling voters the "correct" way to vote was to preference the Liberal candidate first.

The Labor Party lodged an official complaint about the posters earlier this month, but AEC state manager Steve Kennedy told the ABC that the commission found the posters did not breach election laws.

The posters are in purple and white, which Labor argues mimics the branding of the Australian Electoral Commission (AEC) and could mislead Chinese-speaking voters.

Independent candidate for Kooyong Oliver Yates also wants to pursue legal action over the posters.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 54 seconds 54 s Labor candidate Jennifer Yang says the Liberal Party posters are 'unethical'

The posters were displayed at polling booths in his electorate, which has a large multicultural population.

The AEC is yet to officially declare the result in Chisholm, but Ms Liu leads by almost 1,400 votes on a two-party preferred basis.

Any legal challenge would come after vote counting finished.

If the Court of Disputed Returns was to rule in Labor's favour, it could trigger a by-election in Chisholm. But the Coalition would still hold a majority.

Ms Liu organised a press conference for Chinese media on Sunday, where she claimed she was "likely" to be the new member for Chisholm.

Some of Ms Liu's supporters were previously accused of spreading misinformation about her opponents on social media and fuelling scare campaigns.

Gladys Liu, right, attended the Coalition party room meeting this morning. ( ABC News: Matt Roberts )

Additional reporting by Echo Hui