Australia's New South Wales state government has given the green light to using genetically modified crops for the first time.

This overturns a ban that has been in place for several years.

Approval has been given for the use of genetically modified canola crops, which NSW Minister for Agriculture Ian Macdonald said would put local farmers on a level playing field with farmers overseas, said a report in Sydney Morning Herald.

As much as 70 per cent of the global trade in canola is in genetically modified crops, the government said.

NSW farmers had been missing out on export opportunities to countries such as Canada and the United States as a result of the failure to adopt genetically modified canola, the report said.

Proposed legislation allowing the start of GM cropping in NSW involves establishing an expert committee to assess whether the agriculture industry is capable of segregating genetically modified and non-genetically modified crops.

If the committee indicates that the industry is unable to do so, then the minister can intervene to block the start of GM farming.