The NSW State Government has committed $9 million over the next four years ($3 million in 2015-16) in the state budget to trial the effectiveness of medicinal cannabis.

Children with severe epilepsy, terminally ill adults and patients undergoing chemotherapy who are suffering extreme nausea and vomiting will take part in the trials, which were first announced last December.

The experiment forms part of a range of funding allocations being rolled out to fund the next generation of medical research, Medical Research Minister Pru Goward said.

"Medical research unlocks new treatment for disease, offers hope, delivers cures, keeps people well and out of hospital," she said.

"At its best (it) profoundly improves lives."

The move to embrace medicinal use of cannabis, which is an illicit substance in Australia, has sparked interest from other state governments including Victoria and South Australia.