The Liberal candidate for Lyons, Jessica Whelan, has been dumped after racist and sexist comments on social media.
The Liberal Party has confirmed Ms Whelan's comments were "inappropriate".
It has directed Lyons voters to support the National's candidate, Deanna Hutchinson.
In a statement released on Friday morning the party said Ms Whelan accepted she had made some posts that were not acceptable.
"Jess Whelan vehemently maintains that she did not make the vulgar post reported in yesterday's media," the statement said.
"However, she accepts that she has made some of the other posts in question.
"Clearly these posts are inappropriate, and the Liberal Party was not aware of their existence until they were reported.
"Therefore, she has offered her resignation as a candidate and the Liberal Party has accepted it."
We note that our Coalition partners, the Nationals, are running a candidate in Lyons, Deanna Hutchinson, and we would encourage voters to support her and to vote Liberal in the Senate."
It is a big blow for the Party and Prime Minister Scott Morrison who was in Northern Tasmania yesterday and said the Facebook posts had been referred to the Australian Federal Police.
But after more screenshots emerged, Liberal campaign spokesman Senator Simon Birmingham confirmed Ms Whelan would be disendorsed.