Aboriginal elders hope a new court for young offenders will help to drive down the rates of Indigenous incarceration.

About 60 per cent of young offenders locked up in juvenile justice centres in New South Wales are Aboriginal.

Sittings have now begun in the new Koori Court at the Parramatta Children's Court in Sydney's west.

Magistrate Sue Duncombe said she wanted to open the new court because she said current approaches were not keeping Aboriginal teenagers out of jail.

"They're here really because of disadvantage, because they don't have strong connections to family, community and they just go off the rails," she said.

"I found it shocking and I really just wanted to make a difference, I wanted to do something differently, I wanted to give them a chance to show that they can make a difference themselves."

Victoria's Koori Court was established in 1989, and New Zealand also has a similar system for young Maori offenders.

When an Indigenous offender comes to the Koori Court, two elders and a magistrate will sit face-to-face with the offender.

Magistrate Duncombe said the court was interested in finding out the reasons behind why the offender had been arrested.

"Instead of sentencing and then getting them to do programs, we're saying, 'show us that you can make a difference and show us you can stay out of trouble'."

Several elders have agreed to take part in the trial.

David Williams, from the Bundjalung tribe in northern NSW, said he wanted to offer his support to teenagers in trouble with the law.

"I always advise the young people I'm with that it doesn't take brains to do the wrong thing, any dipstick can do that. But if you want to stay on the right side of the fence, I'm here to give you a hand," he said.

The year-long trial will give the offenders more say in which kinds of programs they attend, in the hope of keeping them out of jail.

The elders will look at whether young offenders have lost connections to their culture and community.

They will sit down face-to-face with the elders, rather than standing up in front of a magistrate, creating an informal atmosphere.

"If you see elders there and you look at those elders and you think 'I've told these people I'm Aboriginal and yet here I am fronting up in front of Aboriginal elders and I'm letting the team down', they are going to get that sense of responsibility," Mr Williams said.

"That is so important, that there are consequences if you screw up."

If the trial is considered a success, the state government will consider running a Koori court at Bidura and Campbelltown.