Trials will be conducted in South Australia's Spencer Gulf to find a way of farming seaweed that is both feasible and good for the environment.

The three year $1.1 million project will be primarily funded by the Australian Government's Fisheries Research and Development Corporation.

The South Australian Research and Development Institute will also contribute $189,000 and there will be assistance from the University of Adelaide and commercial partners.

The trial will be set up next to fin-fish farms, such as southern bluefin tuna and yellowtail kingfish, to allow fish waste to be used as a fertiliser.

Dr Jason Tanner, from SARDI, says the seaweed could be farmed for a number of purposes.

"Certainly in Australia there is increasing demand for seaweed as a high end food.

"There is also increasing demand from China and other Asian nations, both as a food and as a base stock for things like pharmaceuticals, for food additives, for cosmetics and that sort of thing."

The trial will be set up on a small scale near Port Lincoln.