Polls in Nepal opened on Monday for the final phase of local polls, the first in nearly two decades and a key step in the country's post-war transition to a federal democracy.

Most of the country has already voted in the landmark polls but the vote was repeatedly delayed in one province of Nepal's southern plains, which was the epicentre of deadly ethnic protests two years ago.

Protests kicked off after a new constitution was passed in 2015, nearly a decade after the end of the brutal Maoist insurgency, with ethnic minority groups saying the charter left them politically marginalised.

Simmering tensions have remained and a political party representing the Madhesi ethnic minority, who live in the lowlands that border India, had refused to take part in polls unless an amendment to the constitution was passed.

They later softened their stance and Monday's vote is being held with their participation and without any changes to the charter.

“The big parties have always pushed our agendas away and now the Madhesi party has also betrayed us by going to elections without amending the constitution,” said resident of the southern city of Janakpur, Saroj Mishra.

Mishra took part in the 2015 anti-charter protests and said he would not vote on Monday.

The government has deployed troops and sealed the border with India, fearing violence in Monday's third phase of voting, which covers around 5.5 million people.

The local polls are part of the final step in the peace deal that ended a 10-year civil war in 2006, and pave the way for provincial and general elections later this year.

Since the end of the decade-long war, the country has suffered persistent instability, cycling through nine governments in a decade.

The last local representatives were elected in 1997 and their mandates lapsed when their five-year terms expired at the height of the brutal Maoist insurgency.

Observers are split on whether the large national parties or local ethnically-affiliated parties will perform strongest in the final round of the local polls.

The nationalistic Communist Party Nepal-Union Marxist Leninist (CPN-UML), currently the second largest bloc in the Parliament, largely swept the first two rounds of voting.

But anger over the marginalisation of ethnic minorities continues to rally some voters in Nepal's south.