Accessible through a mobile phone app, the digital licence can be used for proof of identity and proof of age to enter pubs and clubs, along with roadside police checks.
Victor Dominello, minister for finance, services and property, said: "This trial is the first of its kind in Australia and will allow Dubbo motorists to use their digital driver licence in everyday scenarios with Police and selected licensed establishments".
"The trial will draw on the learnings from the successful roll-out of digital RSA/RCG, boat and fishing licences over the past two years."
"Today we are a step closer to fulfilling an election commitment of delivering a digital driver licence by 2019."
Meanwhile, minister for roads, maritime and freight, Melinda Pavey, said the digital driver's will give people an extra level of security.
"A person’s driver licence is an important proof of identity document. This trial is an opportunity to demonstrate the additional levels of identity security and increased protection against identity fraud that a digital licence provides compared to a physical one," she said.
Participation in the trial is optional, and involves installing a smartphone app, registering a MyServiceNSW account and linking one's NSW driver's licence details.