Walker's three-round total of 192 is 24 under par and a new 54-hole record.
"I feel really comfortable with my game and I'm really enjoying it," said Walker.
The 27-year-old goes into the final round with a six-stroke lead ahead of China's Yu Yang Zhang and England's Charley Hull.
Walker fired 10 birdies and two bogeys to lower by one stroke the previous three-round record set by Gwladys Nocera at the 2008 Gothenburg Masters.
"I would love to win this tournament and I've just got to try and do the same again on Sunday and get as many birdies as I can," added Walker.
Welsh rookie professional Amy Boulden is sixth on 15-under while England's Liz Young is two shots further back in a share of ninth.
Walker needs a final round 66 to set a new Ladies European Tour record for the lowest 72-hole total, which stands at 30-under-par.
Kylie Walker won the Deloitte Ladies Open in May
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