Queensland Independent MP Bob Katter has thrown his support behind the Coalition, but the other two independents are still considering their positions.
However, Mr Katter's decision to announce his position without his colleagues Tony Windsor and Rob Oakeshott has raised expectations that they will back Labor, thereby allowing Prime Minister Julia Gillard to keep her job.
They will announce their decision about 3pm.
Mr Katter said the Coalition had agreed to eight of the 20 points he raised about support for rural and regional Australia, while Labor's policies did not meet any of them. However, he said he would have voted for Labor if it had not dumped former prime minister Kevin Rudd.
Mr Katter said he had worked well with Ms Gillard in the past, and could continue to do so if she remained prime minister.
``I can work well and effectively with her,'' he said.
The decision leaves Labor and the Coalition equal on 74 votes each and means Mr Windsor and Mr Oakeshott will need to back one side, otherwise Australia will be left with a hung parliament of 75 all.
Ms Gillard signed deals with Greens MP Adam Bandt and Tasmanian Independent Andrew Wilkie last week. This meant she could rely on 74 votes in Parliament, to the Coalition's 73 seats.
Earlier today, Ms Gillard and Opposition Leader Tony Abbott made their final pitches to the independents.
Mr Oakeshott said either would make a good and credible prime minister, and he was impressed by the good will of both sides. He hoped people realised how hard their decision was.
''Hopefully there is a recognition this is an unnatural choice that the three of us have got to make. We are independent MPs, we will continue to be independent MPs,'' he said.
The decision confirms the recent pessimism within Coalition ranks, where senior figures believed the momentum was slipping away from them despite the fact the three rural independents - who each have a history with the National Party and conservative-leaning electorates - were initially widely expected to side with Mr Abbott.
The independents have praised Labor's proposed national broadband network, but said they were particularly looking for more support for regional communities and stable government.
Their decision had also been held up by negotiations over parliamentary reform. They wanted both sides to agree to a range of changes before they would reveal who they support.
The changes include a speaker who does not sit in a party room and has a deputy from the opposing party, an integrity commissioner, more time for MPs' speeches and a greater role for committees. Parliament will also open with a daily acknowledgement of the traditional owners as well as prayers.
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