A robot painted to resemble a cow has taken out a national competition for driverless cars in a three-day competition at Deakin University in Geelong.

The team from the University of New South Wales (UNSW) won the Autonomous Ground Vehicle Competition with "Buttercup", a vehicle that navigates around an obstacle course unaided.

Sam Marden, a member of the winning team, said Buttercup featured a series of sensors that allowed it to read the environment as it moved.

"We've got a laser in front, under the cow hat, and that's for detecting the barrels and fences we've got out there," he said.

"We've got two cameras on top, so we can see the lines we've got to stay between.

"On the top there's two GPS receivers, and that's what we use to determine where we are within the course."

Not all of the cars performed well with at least one car crashing into a barrel. ( ABC News: Margaret Paul )

The team from UNSW will go on to represent Australia at a global driverless car competition in the United States next year.

Mr Marden said a completely driverless car could be developed soon.

"We've just shown that we've got the capability of avoiding obstacles and staying between lanes, so surely autonomous cars aren't too far off from that," he said.

The Australian competition was in its second year and featured eight teams from six Australian universities.

Competition coordinator Dr Mick Fielding said the contest was developed by the Defence and Science Technology Organisation, which had an interest in driverless car technology.

"We're looking to advance autonomy capability within Australia, which ultimately will lead into other research fields," he said.

Dr Fielding said the students were impressive.

"The robots are fully autonomous," he said.

"You push the go button, watch them go around the course and cross your fingers, and it's really amazing what they're able to do."

He hoped the competition would expand next year to include international teams.