WARATAH's Calvary Mater Hospital will conduct Australia's first medical cannabis trial for terminally ill patients.
NSW Premier Mike Baird and Minister for Medical Research Pru Goward announced the $9 million, two-part trial at the hospital last week.
Mr Baird said the trial aimed to help better understand the role of cannabis in alleviating pain.
Thirty adult patients from the Hunter will take part in the first trial, which will start early next year.
The trial will evaluate two types of cannabis products - vaporised leaf cannabis and a pharmaceutical.
Patients will assess the ability of the products to alleviate symptoms such as fatigue, low appetite, altered taste and smell for food, low mood, weight loss, nausea, insomnia and pain.
University of New South Wales' Chief Investigator Associate Professor Meera Agar will oversee the trial.
He will assess the tolerance of the cannabis product and see if it causes any unwanted side effects, along with the ideal dosage.
Results of the first trial are expected to be released by the end of 2016.
The second trial will involve a larger number of patients from a number of hospitals across NSW and will start at the end of 2016.