A four-year-old child in NSW is transitioning their gender before their first day of preschool as new data shows a steep climb in the number of children with gender dysphoria.

The child is the youngest of a number across the state currently transitioning, while at Melbourne's Royal Children's Hospital 250 children, some as young as three, have been referred for assistance by the gender dysphoria unit, the Daily Telegraph reports.

Where the child is from or their birth sex has not been revealed.

"We have a number of ­students who are going through gender transition in our schools, with the youngest being a four-year-old at the moment," Education Department deputy secretary of school operations Gregory Prior told a budget estimates hearing probing the Safe Schools program yesterday.

"Without breaching privacy, we have a four-year-old who is transitioning to kindergarten next year who has identified as transgender.

"The Safe Schools is only one resource that can be used from a variety of resources in how we would support that family, student and school to accommodate a child going through transition."

Prominent transgender advocate Catherine McGregor told the newspaper children as young as four were often right about their need to change genders, but advised caution "on making any irreversible decisions at that stage".

Child psychologist Michael Carr-Gregg said it was important people recognise the difference between "dress ups" and transgender children who were often bullied and suffered high suicide rates later in life because they were forced to live in denial.

"There is a huge difference between dress-ups and a child believing with every fibre of their being they are in the wrong body," he told the Daily Telegraph .