Crisis-weary Icelanders are voting in a national election, with the radical Pirate Party seeking to unseat the centre-right government.

Founded four years ago by an assortment of hackers, political activists and internet freedom advocates, the party has made big gains among Icelanders fed up with established parties after years of financial turmoil and political scandal.

Polls suggest the Pirates are vying with the centre-right Independence Party to become the biggest group in the volcanic island nation's parliament, the Althingi.

They currently hold just three of the 63 seats, and Pirate politician Birgitta Jonsdottir said she could "never have fantasised or dreamed" about its current poll numbers.

"If people are ready, we are ready," Ms Jonsdottir said after casting her vote at a Reykjavik school on a blustery day.

The election was called after prime minister Sigmunder David Gunnlaugsson resigned in April amid public protests over his offshore holdings, revealed in the Panama Papers leak.

The tax avoidance scandal outraged many Icelanders, who suffered years of economic upheaval after the country's banks collapsed within a week of one another during the 2008 global financial crisis.

"If people are sick of living in this turmoil that we have been having here in Iceland, where you never know what tomorrow is going to bring, they should put their trust in the Pirates," Ms Jonsdottir said.

"Change is beautiful. There's nothing to worry about," she said. "We are ready to do whatever people trust us to do."

Individual parties rarely win outright in Iceland's multi-party system.

Saturday's vote is likely to produce either a centre-right coalition involving the Independence and Progressive parties that have governed since 2013, or a left-of-centre coalition involving the Pirates, the Left Green Movement and others.

Another unpredictable factor is Vidreisn, or Revival, a new centre-right party founded by former Independence Party members which advocates Iceland joining the European Union.

It is performing strongly among conservative voters seeking a change from the old parties.

"We want to improve things in Iceland," said party leader Benedikt Johannesson. "We are a free trade party, a pro-Western party, an open society party."

Paul Fontaine, news editor of news magazine Reykjavik Grapevine, said the 2008 crisis and the wave of popular protest that followed "broke the mould" of Icelandic politics.

"Icelanders, like many Europeans and North Americans, have grown pretty weary of establishment politics, whether they're on the left or the right," he said.

"I think that explains a large share of the Pirate Party's support."

The election debate has focused on the economy and voters' desire for political reform.

The Pirates promise to introduce direct democracy, subject the workings of government to more scrutiny and place the country's natural resources under public ownership.

The party also seeks tough rules to protect individuals from online intrusion.

Ms Jonsdottir, the Pirates' most prominent voice, is a former ally of WikiLeaks who has called on Iceland to offer citizenship to National Security Agency leaker Edward Snowden.

Opponents claim the inexperienced Pirates could scare off investors and destabilise an economy that is now recovering, with low unemployment and high growth.

"We'd rather be naive than corrupt," Ms Jonsdottir said.

The Pirates have no experience of government, and some voters seeking change say they are sticking with established parties such as the Left Greens or the Social Democrats.

Gunnar Andresson, a teacher, said he sympathised with the Pirates but voted Social Democrat.

He said the Pirates "believe in a good cause, but I don't think they are ready yet".

Youth worker Birkir Vidarsson and his partner, Johanna Jonsdottir, decided to gamble on the Pirates.

"We are brought up with being afraid of new things," Mr Vidarsson said. "That's very Icelandic.

"But with the Pirates being the second-biggest right now (in opinion polls) ... I think strategically it's the right move."

About 245,000 people are eligible to vote in the sparsely populated North Atlantic nation.

Polls close at 10pm local time (2200GMT), with partial results due early on Sunday.