There are claims that security guards at the immigration detention centre on Nauru have been told to prepare for the camp to be opened.
A legal team headed by Melbourne barrister Julian Burnside QC has arrived on the island to file a case on behalf of 10 detained asylum seekers.
The asylum seekers have been charged with rioting, but Mr Burnside will argue they are being unlawfully detained under Nauru's constitution.
Legal experts say that if the case succeeds all of the asylum seekers on Nauru may need to be released.
Sydney human rights lawyer George Newhouse, who is involved with the case, says security staff have been told to prepare for the camp to be opened.
"What we've heard over the past 24 hours is that the detention centre... is to be opened up, so that the Nauruan government can argue that the detainees are not actually being held in immigration detention," Mr Newhouse said.
"Obviously if the Nauruan government is arguing that they're not being unlawfully detained because they're not actually in detention at all, then it will be necessary for them to open up the detention centre and let people run free on the island.
"Under the Nauruan constitution it's unlawful to hold an asylum seeker unless they are being deported, removed or extradited, which clearly these people aren't."
Security staff are believed to have been ordered to bring civilian clothing to work to provide a less intimidating presence.
It is claimed they have also been told to relax a number of security restrictions, including the removal of a gate between the asylum seeker compound and the administration area.
A spokesman for Australia's Department of Immigration would not answer questions relating to any changes at the detention centre, apart from saying that operational procedures there are decided upon by the Nauruan government.
He said any questions about the potential opening of the centre should be directed to the Nauruan government and not the department.
Nauru had a national election at the weekend and no-one from the new government was available for comment.
The eventual full opening of the detention centre was a stated aim of the previous government.