Premier Dominic Perrottet said the $96 million pilot manufacturing facility would spearhead the establishment of a local RNA industry.

The facility will attract substantial private sector investment to trial vaccine manufacturing capabilities locally and position the state as a world leader in biotechnology.

The facility - to be built at a yet to be determined site - would be "the silver lining of the pandemic" and a game changer in the field of medical research, the premier said.

"The COVID pandemic has demonstrated to the world that it is critically important that we have the capability to develop vaccines quickly and for our country to have sovereign capability," he said on Thursday.

"The advent of mRNA vaccines and the crucial role they've played in getting NSW back on the road to a pandemic recovery is just the beginning of what this incredible emerging medical technology can do."

The investment in RNA and biotechnology reflects the government's new focus on cutting edge research and development and a move to attract and train the best and brightest minds in emerging technologies.

"The NSW government doesn't just want to be nation-leading, but world-leading when it comes to industry, ideas and innovation," Mr Perrottet said.

"If there is anything that this pandemic has taught us it is that governments need to be ahead of the curve."

The project is part of the government's plan to create jobs and ensure NSW is set up for a prosperous future.

Construction on the facility will begin within a year and would be developed in partnership with the state's universities, with the funding supporting the NSW RNA bio science alliance with the aim of attracting private investment.

The facility will include labs and pre-clinical trial spaces to enable early stage RNA-based drug development.

RNA technology was used to develop the Pfizer and Moderna vaccines which trigger an immune response that produces antibodies to attack COVID-19.

Treasurer Matt Kean said the facility was "about investing against future pandemics", noting that the medical technology sector already contributing $2 billion to the state's economy.

Jobs Minister Stuart Ayres said the mRNA and RNA technologies and industry had the potential to be used in various industries.

"It's really about making sure that we utilise science and research to allow our bodies to use their own makeup to fight off disease," he said.

"It's not just applicable to humans ... (it) can be used across agricultural purposes.

"It has the capacity to make our hospitals more efficient, it means less time for surgery, it means new ways of fighting off diseases," he said.

"We've only just scratched the surface."

Australian Associated Press