A state-first network of experts will be set up to develop technology that will help cut out the use of animals in medical research and deliver better treatments for patients.
The Non-Animal Technologies Network will be set up with $4.5 million of NSW government funding to explore alternatives to animal testing.
It will investigate options such as the use of human cells or tissues in place of animal trials during the development of drugs and other medical advances.
The network will include experts from several major NSW universities, as well as organisations such as the Victor Chang Cardiac Research Institute.
Non-animal technology was starting to exceed the performance of animal models through the use of human material that was biologically similar to the patients being treated, the government said in a statement on Thursday.
The funding will support competitive research grants and a working group to develop regulations, in addition to financing the establishment of the network.
Medical Research Minister David Harris said it was the first time such a system for non-animal technology had been set up in NSW.
"By investing in cutting-edge, non-animal technologies, researchers may be able to better predict which therapies work in humans, accelerating discoveries that could save people's lives," he said.
NSW in March passed world-first laws that banned forced swim and smoke inhalation tests on animals.
The swim tests had been used to screen anti-depressant drugs by placing a mouse or rat in a beaker of water and forcing them to swim, offering no escape route.
The private members bill from Animal Justice MP Emma Hurst passed with government support.
The state budget, delivered in June, included $21 million for animal welfare initiatives, including extra support for approved charities.