Sheena Watt to become Labor's first female Indigenous state MP as Premier defends intervention

"That outcome fills me with joy for Sheena and the Aboriginal community, and I have rung her to congratulate her on this important moment for Labor in Victoria."

Mr Andrews' allies had been canvassing support for Ms Stewart ahead of his public intervention at a press conference on Friday. He called on his faction to "do something special" when it met on Sunday to select their nominee to replace Ms Mikakos.

Several Left Labor sources say the Premier wanted Ms Stewart to be preselected, but his public comments prompted a backlash from his faction, who rallied around Ms Watt to "send a clear message" to Mr Andrews.

On Saturday the Premier reiterated his comments in welcoming an Indigenous candidate's nomination and shrugged off internal accusations of over-reaching in the preselection process.

“Well, that’s called leadership,” he said in his 93rd consecutive press conference.

“That’s what I’m about. So I’m really pleased. It’s a really, really good outcome. And we haven’t missed the moment. There’s a moment there and we've seized it, and I think that’s a really important thing.”

But Mr Andrews took a sly dig at those who "trade in business as usual" and said he was pleased if he had played a part in Labor appointing its first female Indigenous MP.

"I just thought it was appropriate to make the point that 'business as usual' was not the appropriate thing to do," he said.

"Now of course, there are many people who like 'business as usual'. They trade in business as usual, and they get very upset when they perhaps can’t continue doing that. But this is a really, really good outcome I think … and I’m pleased to have got involved.

"That’s what being the leader of the government, the leader of the state, the leader of the party is all about."

Ms Watt secured 32 out of the 36 votes on the Socialist Left public office selection committee.

With internal party democracy still suspended in the wake of the Adem Somyurek branch-stacking scandal, the new MP will be chosen through a recommendation from the Premier to Labor's national executive, with the faction expecting Mr Andrews to respect the result of Sunday's ballot.

Maurice Blackburn lawyer and former MP Jennifer Kanis, former Hume mayor Casey Nunn and long-time political staffer Mat Hilakari were competing for the seat, with Ms Nunn and Mr Hilakari considered the early favourites.

The party's Victorian president Susie Byers, who had also been expected to enter the contest, ruled out her candidacy on Thursday and urged her colleagues to support a First Nations woman for the vacancy.

In announcing her decision to withdraw from the race on Saturday morning, Ms Stewart thanked people inside and outside the Labor Party who supported her during the preselection process.

"It has been an honour for me to be part of the Bracks, Brumby and Andrews' governments reform of Aboriginal heritage protection, Traditional Owner recognition, Treaty and First People's Assembly, Truth and Healing Process and Stolen Generations Redress," Ms Stewart said.

"I look forward to the ongoing work of the Andrews' government, with the knowledge that the Victorian Aboriginal Community will have a First Nations' person within the ranks of Labor's parliamentary team."