Premier Jacinta Allan has vowed to fight any leadership challenge, as her future as party leader hangs in the balance.
Last night, the ABC reported factional powerbrokers met to discuss whether Premier Jacinta Allan still had the majority of support from the caucus and decided she does not.
Ms Allan is this morning meeting with cross-factional delegates, during which the ABC understands she will be given the opportunity to resign.
If she refuses, her leadership is expected to be challenged tomorrow.
In a letter sent to Labor's state secretary today, Ms Allan said she would not be stepping aside, saying she intended to run as a candidate for the party's leadership "in the event that an election is required".
Under Labor party rules, if there is more than one candidate for the party's leadership, an election must be held among MPs and rank-and-file party members in a process that takes weeks.
The ABC understands Labor ministers and MPs have called her deputy Ben Carroll to urge him to challenge the premier's leadership.
Sources close to him say he is seriously considering it.
Labor's Victorian MPs were this morning arriving for a pre-planned state cabinet meeting.
Labor's polling numbers have been fairly dire in recent months, with an opinion poll published by News Corp in June reporting a majority of voters believed it was time for her to be replaced as Victoria's Labor leader.
Ms Allan's response to alleged corruption in the taxpayer-funded Big Build scheme has also caused controversy.
There are four months left until the state election in November.
Federal Liberal senator for Victoria James Paterson told the ABC this morning that any move to roll Ms Allan would be "too little, too late".
"It sounds like the factional bosses have finally caught up with the sentiment of Victorians, which is they want this premier gone.
"A shift of horse at this very late minute to a new premier is not going to change anything fundamentally."
While no formal challenger has put their hand up, Mr Paterson said Mr Carroll's role in former premier Daniel Andrew's government would not do him any favours.
"He participated in every decision this government has made over the last few years. He was even a cabinet minister under Daniel Andrews," Mr Paterson said.
"I really think at this late stage it won't change much as Victorians clearly want a change of government."
Federal Labor MP Kristy McBain said she thought Ms Allan had done a "really fantastic job in the time she's been given".
"I think it is really important at the moment, you know, we're in a situation where we've got a rapidly evolving world out there, and we need strong and steady leadership in each state and territory across the country," she said this morning.
"But ultimately, those questions are for the Victorian parliamentary party."
Jacinta Allan was first elected to the Victorian Parliament in 1999, winning the seat of Bendigo and becoming the youngest female Victorian MP at the age of 25.
Her first ministry was the education services and youth affairs portfolio in 2002.