It is understood the independent Senator has informed the Turnbull Government and Senate colleagues she may resign over the section 44 issue.
The senator told Tasmania Talks radio on Tuesday morning that she would resign after discovering that her father had not renounced his United Kingdom citizenship and it was "quite clear" that it meant she was also Scottish.
Lambie dismissed concerns that she was ineligible for parliament last week after rumours started to surface her dad was a British citizen. However she is awaiting confirmation from British Authorities. "I am proud of my Scottish ancestry and my father is too", she said at the time.
Lambie, who is also writing an autobiography and intends to run candidates in the Jacqui Lambie Network party at the next state election, said she would run again at the next federal election.
While some political insiders remain unsure how the replacement processes in Tasmania will ultimately play out, the ABC's election expert Antony Green, told Guardian Australia on Tuesday if both Parry and Lambie were knocked out "there is no question over Nick McKim's position".
Senator Lambie will be the eighth parliamentarian forced out of Parliament due to dual citizenship.
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"I'm happy to put on record that I'm satisfied that my parents are both Australian citizens and I have no concerns about me being a dual citizen because of where they were born or came from", she told Tasmania's Examiner newspaper.
'If I am a dual citizen I will resign.
As with the other recently disqualified senators, Senator Lambie's position would normally go to the next person on her Jacqui Lambie Network ticket in the 2016 election, following a recount.
Government backbencher John Alexander resigned on the weekend because he is a dual UK-Australian citizen, but he'll contest a by-election for his old seat of Bennelong on December 16.
Adherence to that rule in a country where more than half the population of 24 million was either born overseas or has a parent who was born overseas has only come under the spotlight in the current crisis, with the High Court confirming a strict interpretation of the law.
The two major parties have only today struck a deal on how to deal with MP's citizenship disclosures.