German Chancellor Angela Merkel received a standing ovation that lasted nearly 10 minutes on Friday after giving her final speech as head of Germany's Christian Democratic Union (CDU) at a party conference set to determine her successor.

Dozens of CDU delegates at the conference in Hamburg held up banners reading "Danke Chefin" - German for "Thanks, boss" - as they listened to Merkel's final speech after 18 years at the helm of the party.

Merkel cited Germany's balanced budget policy, the end of military conscription in 2011 and the management of the refugee crisis in 2015-16 as major achievements of the conservative CDU during her tenure as leader.

"We have a lot left to do," Merkel said as she walked off the stage, just hours before a party leadership vote.

Three candidates are running for the top CDU job. While polls of party members show Merkel ally Annegret Kramp-Karrenbauer edging ahead, former CDU heavyweight-turned-businessman Friedrich Merz has secured the backing of key party figures in his bid to take the reins.

Health Minister Jens Spahn is also in the running, but is not considered a serious contender.

Speaking shortly before the conference, Merkel said she hoped the CDU would emerge "primed, motivated and united."

"Together we want our CDU, as a strong party of the [political] centre, to live up to its mandate, to radiate persuasive power and to provide the right offering for the future of our country," Merkel said.

The winner, who will be chosen by 1,001 party delegates at the conference, could be taking a major step towards becoming chancellor, with elections set to take place in 2021.

Merkel intends to serve out the end of her term until then, but Friday's vote may also be decisive on whether she lasts that long.

Economy Minister Peter Altmaier did his best to dismiss claims that the party is selecting a future chancellor early Friday.

"We are voting for a new party leader today, we are not voting for a chancellor candidate," Altermaier, a long-standing ally of Merkel, told Deutschlandfunk radio, adding that that decision would be made one year ahead of the 2021 election.

The 56-year-old Kramp-Karrenbauer, a former state premier who has been dubbed "mini Merkel" because of her pragmatic centrist political style, was elected CDU secretary general in February as part of efforts to give the party fresh momentum.

In addition to sections of business, the 63-year-old Merz has also won support from conservative CDU members who see him as pushing the party to the right, thereby standing up to the challenge represented by the right-wing populist Alternative for Germany (AfD) party.

Merz's bid to succeed Merkel comes nearly 10 years after he left the national political stage, when he lost out to Merkel in a party power struggle.