Premier Mike Baird announced the NSW government's $3.5 million commitment and partnership with British-based GW Pharmaceuticals on Tuesday, describing the moment as a historic day for the state and for the hundreds of families across NSW who live with the debilitating effects of drug-resistant epilepsy.

"It's a day that I know has given hope to many of these families ... if we can bring relief to these poor children, who wouldn't want to do that?" he said at Randwick Children's Hospital.

Compassionate access to medicinal cannabis Epidiolex, which has shown positive results in epilepsy trials in the United States, will be available from early 2016. A second cannabis-derived drug, CBDV, will for the first time be trialled on epileptic children.

NSW Minister for Medical Research Pru Goward, who travelled to London to help secure the deal with the cannabinoid producer, held back tears and reached for Mr Baird's arm as she described the announcement as one of the proudest days of her career.

"It's something they said couldn't be done," she said of the political hurdles and stigma attached to cannabis-derived medication.

Speaking about the "heartbreaking" lives of children such as seven-year-old Tyler Oldenburg, she added the investment would benefit some of the state's most vulnerable patients.

Tyler, from Greystanes, has up to 40 seizures a day, from those that last a few seconds to "grand mal" episodes that last up to 90 minutes. He requires full-time care and is often hospitalised after severe seizures.

"I'm trying not to cry. It would help him immensely to give him a quality of life," his mother Nicole Suttle said after the surprise announcement.

Her partner, Matthew Oldenburg, added the news came as a shock and a relief. "We've heard about trials overseas but actually coming to Australia is a whole new ball game."

Seeing his son in pain and with constant side-effects of traditional epilepsy medication means that he and Ms Suttle are "the first ones putting our hands up" for Tyler's inclusion in the trial, he added.

Research will be overseen by John Lawson, who said that the government had been "incredibly brave" to back the use of cannabis in children's health.

Dr Lawson added the medicines do not come without risks and underlined that the compounds in medicinal cannabis are not the same as those found in street cannabis.

Carol Ireland, of Epilepsy Action Australia, said the breakthrough had come after five years of campaigning and that Australia was well behind the US in the field of medical cannabis use.

The epilepsy trials form part of the state's $9 million research into medical cannabis, as announced by the Premier in December.

Adults with terminal illness and people with nausea induced by chemotherapy are also involved in the research.