Green is 11 under after nine holes at Adelaide's Kooyonga Golf Club on Sunday, two strokes clear of Agathe Laisne from France.
Argentina's Magdalena Simmermacher (eight under) holds third spot, while Australia's Cassie Porter is making a final-round charge.
The Queenslander teed off at even par but has fired seven birdies in a 10-hole stretch and is seven under with seven holes remaining for her tournament.
World No.9 Green teed off with a one-shot buffer from Simmermacher.
The 29-year-old from Buenos Aires briefly draw level with Green in the event co-sanctioned between the LET and WPGA Tour of Australasia.
But Simmermacher faltered with two bogeys in three holes as Green sank a 25-foot putt on the par-4 fifth to reclaim her advantage.
The West Australian, bidding to become the first local winner of the Open since Karrie Webb in 2014, also birdied the par-5 ninth to increase her lead - she is two under through nine holes on Sunday.
Australians Karis Davidson (six under) and Kelsey Bennett (four under) are the next-best locals as compatriot and three-time major winner Minjee Lee's struggles continued.
Lee signed for a one-under 71 to finish the tournament at three over.
Countryman and fellow major winner Grace Kim is belatedly making ground - she is five under through 16 holes but out of contention at three under for the tournament.
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