The ABC has projected Labor will govern in majority in Victoria, where Premier Daniel Andrews has led the party to victory.

The win is despite the party suffering some large swings against it, particularly in Melbourne's west and north, in areas once considered its heartland.

But Labor has picked up seats in the east of Melbourne, where it once stood no chance against the Liberal Party.

By 10pm, the ABC had projected a Labor win in at least 50 seats, with the Liberals ending up with a net loss.

It means Mr Andrews has led his party to a third consecutive election win, equalling former premier Steve Bracks's record.

The party faithful celebrated at Labor's election-night party after news of the victory.

Deputy Premier Jacinta Allan said the Liberal Party's strategy to focus on Mr Andrews "seems to have backfired".

Both Labor and the Liberals campaigned on the reputation of Mr Andrews — a polarising two-term premier who became the face of lockdowns.

Speaking after the ABC projected Labor would win the election, Ms Allan said Mr Andrews' preferred premier rating had been "particularly strong throughout this campaign".

"The Liberal Party chose to put him on their how-to-vote cards, that seems to have backfired," she said.

Ms Allan said she expected some swing against the ALP after the strong result at the last election but key seats in the eastern suburbs, such as Ringwood, Ashwood, and Box Hill, were likely to be retained.

"We are holding onto those seats in the eastern suburbs, according to the results we are seeing on the board here," she said.

"This is a bitter blow for the Liberal Party."

The junior Coalition partner, the Nationals, has performed much more strongly in the regions.

Liberals needed to do 'much better'

Speaking on the same ABC election panel, shadow treasurer David Davis said the Liberal Party needed to do "much, much better".

He pointed to the multicultural seat of Box Hill.

"I think part of it is campaigning ... I think headquarters was not good with multicultural communities ... I think that that is one factor through some of those seats that we've got to really focus on," he said.

Former Liberal staffer and Redbridge political consultant Tony Barry said traditional areas had been a "killing field".

Labor went into the election with a 56-seat majority in the state's 88-district lower house, compared to the Coalition's 27 — made up of 21 Liberals and six Nationals. The crossbench consisted of three Greens MPs and two regional independents.

The Greens look set to increase double their number of lower-house seats, while regional independent MPs have lost their seats to the Nationals.