Prime Minister Scott Morrison will today install former Labor Party president Warren Mundine as the Liberal candidate in the knife-edge seat of Gilmore, ousting the man who had already been preselected by local members.

The NSW Liberal Party state executive was issued with a "very urgent" electronic ballot to consider the Gilmore preselection on Tuesday morning, the first in a series of votes expected to parachute Mr Mundine onto the ballot paper.

Former ALP boss Warren Mundine will be the Liberal candidate for the seat of Gilmore. Credit:Pat Scala

Five senior Liberal sources confirmed a cross-factional deal for the state executive to sign off on the endorsement on Tuesday, which will be announced by Mr Morrison and Mr Mundine in the electorate on Wednesday morning.

Liberals in Gilmore, on the NSW south coast, had already chosen real estate agent Grant Schultz to contest the marginal seat, replacing the sitting member Ann Sudmalis, who is leaving politics.