Rank outsider Knight's Choice upset favourite Buckaroo on Tuesday to win the A$8 million (US$5.25 million) Melbourne Cup, earning Irish jockey Robbie Dolan a debut victory in Australia's "race that stops a nation".

The five-year-old Australian-bred gelding came home by a nose in a photo finish ahead of Japanese raider Warp Speed and the Jamie Kah-ridden Okita Soushi in the energy-sapping two-mile handicap at Flemington.

"Pinch me, I'm dreaming," said 28-year-old Dolan, a part-time singer who was riding in the famous race for the first time.

"It is incredible. I can't believe it. I don't even know what to say.

"I didn't know what to expect, but I feel like I've ridden it 10 times because I have ridden it in my head 100 times.

"I can't put it into words. It is the biggest race in the world."

It was a huge breakthrough for Dolan, who was previously best-known for appearing on The Voice, an Australian singing show.

"I'll be singing tonight after a few beers," he said, overcome with emotion.

Buckaroo, priced as the A$7.00 favourite, finished ninth while the fancied Vauban could only manage 11th on a warm and sunny day, with the track firm.

A cultural institution in Australia, the Melbourne Cup has been run since 1861 and is considered so important it is a public holiday in its host state of Victoria.

Held in front of a bumper crowd, drinking and socialising took priority over racing for many, with the sound of popping champagne corks accompanying the thundering of hooves.

Breaking from barrier six, the John Symons and Sheila Laxon-trained Knight's Choice, an 80-1 shot, settled towards the back of the 23-strong pack behind early leader Just Fine.

With 1,000m to go, Just Fine was still ahead but was slowly reeled in down the home straight and finished last, with Knight's Choice surging from 20th at the final turn for a thrilling victory.

It was a second win for Laxon, who became the first woman to train a Melbourne Cup winner in 2001 with Ethereal.

"He did, he did," she said, lavishing praise on Dolan. "We didn't give him instructions, he knew what to do."

Symons added: "I was worried. He got further back than we talked about, but great ride. What a thrill. What a thrill."

Mark Zahra, who rode the last two Melbourne Cup winners -- Without a Fight and Gold Trip -- was denied a hat-trick aboard Circle of Fire, finishing sixth.

And Kerrin McEvoy's bid for a record-equalling fourth win was also unsuccessful, with his horse Absurde fifth.

A record four women jockeys took part with Kah faring best on Okita Soushi.

Michelle Payne is the only woman rider to win the Melbourne Cup after she steered Prince of Penzance to victory in 2015.

There was one withdrawal by stewards before the race started with French import Athabascan found to have an irregular heartbeat, reducing the field to 23. (AFP)