But rivals Red Bull reckon the 2018 Formula One championship already looms as a one-man show, warning that results will depend on "how fast Lewis wants to go".

Mercedes gun Hamilton, 33, sounded his intentions for 2018 by dominating practice at Albert Park on Friday.

After topping the timesheets in the first 90 minute session by half a second, the Briton went even faster in the second by clocking one minute, 23.93 seconds on the 5.3km circuit.

He was 0.12 of a second ahead of Red Bull's Max Verstappen with Hamilton's Mercedes teammate Valtteri Bottas third fastest.

Four-time world champ Sebastian Vettel of Ferrari was fifth quickest with local hope Daniel Ricciardo of Red Bull seventh in the 20-strong field.

Hamilton showed no sign of slowing down as he looked to equal Argentine great Juan Manuel Fangio's five world titles in 2018.

Only Michael Schumacher has won more with seven championships.

But Mercedes team chief Toto Wolff baulked at talk of Hamilton joining Fangio's elite club this year ahead of Sunday's season-opening Australian Grand Prix.

"With four championship titles he is already in a good group of drivers but I don't think it is a good omen to think too much about it (Fangio's record)," he said.

"It is better to look at those records afterwards."

After impressive testing results, Red Bull is this year expected to join Ferrari and threaten Mercedes who have claimed four-straight drivers' and constructors' world titles.

However, Red Bull team chief Christian Horner believed Hamilton was still clearly the benchmark.

"It's a long season. Form will vary from race to race and 21 races is a gruelling calendar so it will be fascinating to see how teams develop during the year," he said.

"It is the rate of development that will dictate the outcome of performance over the season but you'd have to say Mercedes look in great shape.

"It depends on how fast Lewis wants to go."

Wolff was confident Britain's highest paid sportsman Hamilton would soon re-sign a reported three year deal worth more than $70 million a season.

"Discussions are going in the right way. We are about to finalise the last topics (of contract)," he said.

Asked how long Mercedes could stay on top, Wolff said: "I have tried to find a stat of a team in a sport that is winning every year and there isn't one - at some stage someone else picks up the ball and runs faster.

"We have to be on our toes every year.

"We have to be motivated, not taking anything for granted.

"We will be running around with a target on our backs and everyone is trying to get us."

Qualifying will be held from 1700 AEDT on Saturday.

Australian Associated Press