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Liberals are backing former planning minister Matthew Guy as Victoria's new opposition leader, and hope a new era of "fast-forward politics" return them to power.

It came as Peter Ryan announced on Monday, in the wake of disastrous election results for the Coalition, that he would step down as Nationals leader after 15 years.

Jockeying continues for a new Liberal leader, with Mr Guy understood to have the numbers. Former treasurer Michael O'Brien has also been touted as a possibility.

Mr Ryan said it was time for renewal and the party had struggled to sell their message to rural voters.

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"I started in December 1999 and this next century on, almost 15 years on, I think it's time to finish."

The Nationals performed poorly at Saturday's election, losing the ultra-safe seat of Shepparton to an independent, an upper house seat in Western Victoria and are facing a tough fight in Morwell, previously a safe seat.

Mr Ryan said he intended to serve a full term as the member for Gippsland South and former water minister Peter Walsh would be a "terrific" successor. The party will choose a replacement on Wednesday.

Mr Ryan, who was Denis Napthine's deputy premier, had been very confident about the Coalition's chances of victory at the election despite polling indicating they were in trouble.

The Nationals areunder threat of losing their third party statusand their formal Coalition agreement with the Liberals is also showing signs of breaking up.

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Ryan quits as parties look to the future