Parkes MP Mark Coulton and Deputy Prime Minister Barnaby Joyce unveiled "virtual fencing" in Coonabarabran while announcing the funding, which would use sheep to control the spread of weeds.

Mr Coulton said the purpose of the trial was to determine whether using high-tech collars on sheep, that would set barriers for the animals using warning sounds and mild electric shocks, was a potential option in the future.

"This is a trial, to assess whether this is technology could have an application in agriculture. It is part of the government's investment in the Agriculture White Paper that will help drive innovation in agriculture," he said.

"Improving and finding new ways to manage pest animals and weeds and ensuring people can access those tools as soon as possible is critical to driving greater returns through the farm gate."

Star pickets are set up with devices that establish the virtual barrier the sheep will be kept in. When sheep get close to the barrier, it triggers a buzzer on the collar and if they continue to approach, they get a mild shock.

In time the sheep associate the buzzer with a potential shock and move back within the boundaries.

Mr Coulton said the benefits of the system were the ability to quickly relocate stock and intensively graze areas without the time-consuming need to put up fencing.

Mr Joyce said virtual fencing was a modern implementation of a proven weed control method.

"Grazing management is a proven tool for reducing the impact of common weeds on agricultural production and ecosystems," he said.

"However it only works if farmers can target the right area in a paddock at the right time."

"If the trials show real potential, this project could significantly increase the area of Australia that can benefit from virtual fence technology."