Frankston mayor Nathan Conroy will contest the seat for the Coalition in an election brought on by the death of the respected Labor member Peta Murphy, who died from cancer in December.

Announcing Mr Conroy's selection, Opposition Leader Peter Dutton said the local mayor was "known to locals as a champion, somebody who fights for the issues that are important to the people here in the local community".

Mr Conroy, who has won three consecutive terms as mayor, indicated that the financial pressure on families would be a key focus of his campaign.

"The cost-of-living crisis is real. People are actually choosing between bills and food," he said. "More and more people are becoming homeless because of this housing crisis, due to the cost of living crisis caused by the Labor government."

The seat, south-east of Melbourne, has historically voted for the Coalition but Ms Murphy won it for Labor in 2019 and held on with an increased majority at the 2022 poll.

The government holds the seat by a margin of just over 6 per cent but is expected to face a tough fight to retain it without Ms Murphy's strong personal vote and widespread financial stress caused by high living costs and interest rates. Mr Albanese's popularity has also slid.

But confidence in Mr Dutton's leadership and his highly partisan approach could also be undermined if the Liberals fail to snatch the seat back from Labor.

Last week Mr Albanese announced the selection of community advocate and political neophyte Jodie Belyea, who was recruited to the Labor Party by Ms Murphy, as the government's candidate for Dunkley.

Ms Belyea said she was "not a career politician" who would have "big shoes to fill".

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Mr Albanese backed the candidate through the preselection process and said she would be "a champion and work hard for her community".

"I believe she'll do an outstanding job taking the skills that she has learned as an advocate for the community sector...onto the floor of the House of Representatives to build on the extraordinary legacy that Peta Murphy built," he said.

A date for the byelection is yet to be set.