Around 62 million voters have been called upon to elect Germany's 18th Bundestag, lower house of parliament and early computer projections are expected shortly after the polling stations close at 6 pm local time (9.30 pm IST).
Opinion polls in the run up to the election have been predicting a neck-and-neck race between the ruling conservative-liberal coalition and the opposition parties.
Merkel's Christian Democratic Union (CDU), its Bavarian ally Christian Social Union (CSU) and the liberal Free Democratic Party (FDP) are expected to win around 45 per cent of the votes, according to the last opinion polls ahead of today's vote.
If the free democrats fail to cross the five per cent threshold for parliamentary representation and thereby deprive the government of a victory in election, Merkel, 59, has the option to form a new a "grand coalition" with the opposition Social Democratic Party (SPD).
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The FDP, which won 14.6 per cent in the last election four years ago, is hovering around the five per cent hurdle and its chances to poll sufficient votes to gain parliamentary representation have been made more difficult by a campaign by the CDU in the past days advocating its voters against voting for the liberals.
FDP's leading candidate Rainer Bruederle and other leaders argued that CDU voters' "second vote" for the FDP is crucial for the coalition to return to power and for chancellor Merkel to remain in office.
At her last campaign rally in her constituency of Stralsund, in northern Germany, chancellor Merkel had emphasised that the FDP continued to be her "preferred partner" to form the next government, but the CDU has "no votes to donate" and called upon her supporters to give both votes for her party.