The first licences to go digital will be recreational fishing licences, responsible service of alcohol (RSA) licences, and responsible conduct of gambling (RCG) licences.

NSW Minister of Finance and Services, Dominic Perrottet, is expected to announce the initiative on Wednesday during his keynote speech at the GovInnovate forum in Canberra.

"This technology will allow our citizens to display, apply, update and renew their licences using their smartphone, with real time information also available," he is expected to say.

Physical licences will still be available to those who want them.

Previously, anyone collecting an RSA or RCG licence would have to visit a Service NSW centre, which can be problematic for people in rural areas due to the lack of centres in those areas.

With online security a big issue in this day and age, the safety of the information in the digital licences will surely be questioned.

To combat this, Mr Perrottet will announce the digital licences will have "security safeguards" built into them so it will be easier for authorities to verify their validity.

Exactly what safeguards those are is unclear.

Security expert Troy Hunt said he was sceptical about the digitisation.

"I'm really surprised if it gets traction because it is a hard thing to enforce," he said

"Nowhere in the world has done anything like this."

The NSW government issues about 23 million licences each year with nearly 770 different types of licence and identification cards available across the state.

Additional digital licences will be made available in the future, with another five common licences available online in 2017. Asked when driver's licences would go digital, the state government said they are working on making them available towards the end of 2018.