Tennis legend Rod Laver is dreaming of an Australian Open final between veterans Roger Federer and Rafael Nadal.

The men's draw has been blown wide open following the exits of world number one Andy Murray and six-time champion Novak Djokovic at Melbourne Park.

Murray was stunned by Mischa Zverev in the last-16 on Sunday, after former world number Djokovic was dumped out in the second round by Denis Istomin.

The pair's absence has seen 17-time grand-slam winner Federer and 14-time major winner Nadal emerge as candidates for glory and it has Laver excited.

"It was pretty amazing that Djokovic lost, a little surprising and then of course Murray goes out, it does open the draw up," the 11-time grand-slam champion said on Monday.

"Yeah, it would be nice to see [Federer and Nadal] in the final.

"They've been battling each other for probably the last 11 years and now they're here with a good chance to go through.

"But again, any of these younger players coming through can be troublesome."

Laver was particularly full of praise for Swiss veteran Federer.

Federer advanced to the quarter-finals thanks to a 6-7 (4-7) 6-4 6-1 4-6 6-3 win over Kei Nishikori on Sunday as the 35-year-old showed he is still capable of brilliance following a prolonged spell on the sidelines due to a knee injury.

"It is amazing to think that Roger Federer is playing as well as he is at this moment," Laver said.

"He had a knee operation which took him back, he's been out of the game for six months.

"He's been working awfully hard and I think that's probably been the best thing; he probably never had this much time to prepare for specific people.

"I have not seen him play a backhand this good, as consistently as it has been the last three or four days."