'This is unbelievable': Serena Williams out after drama-filled Aus Open epic

Serena Williams and grand slam drama are a match made in heaven.

On Friday at the Australian Open, the American’s third round clash against China’s Wang Qiang was no exception as she crashed out at Melbourne Park in a three-set epic.

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Williams came to Melbourne Park as one of the favourites for the title after claiming her first trophy as a mother in Auckland before the tournament.

The 23-time grand slam singles champion is still just one major trophy away from Margaret Court’s incredible record.

However, she simply had no answer for her Chinese opponent early on, with the 28-year-old playing some of the best tennis of her career.

The Chinese 27th seed took it to her big-hitting opponent, delivering some massive winners to rattle the American champion, before taking a tense opening set 6-4.

Fans inside Rod Laver Arena seemed genuinely shocked as Williams appeared on the verge of being bundled out of the third round in straight sets.

Wang had a chance to serve out the match at 5-4 in the second set but Willians showcased what makes her the champion that she is.

The American refused to give up, digging deep and coming up with some big shots to break back.

Williams then recovered from two breaks points down on her own serve by winning the next four points to edge ahead in the second set.

Wang sent the second set into a tiebreaker after holding her own serve but as she so often does, Williams found another gear.

The American dropped only two points in the tiebreak to send the match into a deciding set and leave viewers in disbelief.

"This is unbelievable. I think everyone is in shock at what is happening here," Jelena Dokic said in commentary.

Barely anything could separate the players in the decider as both women held their own serves through the first 10 games.

Williams gave herself a sniff at a break after coming out on top in an epic rally in the 11th game.

However, it was Wang who continued to come up with the big winners as she once again moved within reach of a massive upset.

Wang overcomes jitters to see out big upset

Williams found herself in trouble on her crucial sixth service game of the set as Wang set up two match points.

The American hung on after wining the next two points but her normally reliable serve was showing signs of shakiness.

Wang set up up another match point and this time made it count, as Williams sent a backhand passing shot crashing into the net.

Wang, who beat Ashleigh Barty at last year's US Open, ousted the eighth-seeded American 6-4 6-7 (2-7) 7-5 in a match lasting two hours and 41 minutes.

It was Williams' earliest exit at Melbourne Park in 14 years.

Wang was on the verge of what would have been a straight-sets victory when she served for the match at 5-3 in the second set, only for Williams to secure her only break on Friday.

The seven-times Melbourne Park champion went on to dominate the tiebreaker.

But Wang held her nerve in a tense final set, securing the crucial break in the 12th and final game with her third match point.

"My team always believed I could do it," said Wang, who won only one game in her previous encounter with Williams in the quarter-finals at last year's US Open.

"After last year I did really hard work on and off the court."

Wang said she had no plans to celebrate Chinese New Year on Saturday, preferring instead to rest up and prepare for her fourth-round encounter with Ons Jabeur.

The Tunisian sent former world No.1 Caroline Wozniacki into retirement by beating the Dane 7-5 3-6 7-5.

In other matches, seventh seed Petra Kvitova from the Czech Republic belted No.25 seed Ekaterina Alexandrova from Russia 6-1 6-2.

With AAP