The Australian cricketers need 201 runs to win the fourth Ashes cricket test with all 10 wickets in hand in Melbourne.
After containing England's second innings to just 179, Australia will start the fourth day 30 without loss.
Australia offspinner Nathan Lyon took five for 50 as England lost their last five wickets after tea for the addition of only six runs.
Chris Rogers will resume on 18 with fellow opener David Warner on 12.
Australia hold an unassailable 3-0 lead in the five-test series.