Andy Murray's dream of winning a maiden Australian Open title was left in tatters on Sunday after the top seed and world number one was knocked out in the fourth round by Mischa Zverev.

German Zverev, in the fourth round at a grand slam for the first time after a career ravaged by injury, flummoxed his contemporary with his unorthodox serve-volley game and broke the Wimbledon and Olympic champion eight times over the contest.

The world number 50 served like a demon and was helped by a below-par performance from the Briton but thoroughly deserved his 7-5 5-7 6-2 6-4 victory over three and a half hours on Rod Laver Arena.

"Honestly, I was in a little coma, I just kept on serve-volleying my way through," said Zverev, who will meet Roger Federer or Kei Nishikori in the last eight.

"There were some points I don't know how I won. I got excited, but the crowd is here, how can you not stay focused? It means the world to me."

When reigning champion Novak Djokovic departed in the second round at the hands of world number 117 Denis Istomin, Murray must have thought he would never get a better chance to win the year's first grand slam.

"He deserved to win because he played great when he was down, and also in the important moments," said the 29-year-old, who had lost five finals at Melbourne Park, four of them to the Serbian.

"I was kind of behind in the last couple of sets the whole way (but) I have had tough losses in the past and I have come back from them."

Murray prides himself on the variety off weapons at his disposal but some, like his lob, deserted him on Sunday, while others were undermined by the lack of pace Zverev offered him to work with.

Zverev was inspired and came up with some brilliant shots as he charged to the net 118 times, breaking the world number one five times in the first two sets alone.

The 29-year-old served up his first ace to take the first set and Murray was forced to up his level of aggression to bring the match back to parity with a backhand winner down-the-line on his fifth set point in the second.

If the Scot thought he was on his way out of the woods he was wrong, however, and Zverev broke him for a sixth time to take a 3-2 lead in the third, and again for 5-2 before serving out the set when Murray dumped a backhand into the net.

An eighth break early in the fourth set triggered serious alarm bells among the large British contingent on Rod Laver Arena but Murray was unable to find his way out of his funk.

There were some nerves as Zverev served for the match, he netted one straightforward overhead, but he recovered his composure to go through to the quarter-finals when Murray sent a forehand long.