The garden has been constructed next to the Dubbo Regional Botanic Garden. It features sandstone yarning circles, a fire pit and a rainbow serpent focal piece made of native plants.

Traditional dancers first cleansed the area before they performed and a smoking ceremony was held.

Lewis Burns said the garden was a "good step towards reconciliation".

"It shows Dubbo council is considering the Aboriginal population in their plans, which is a good thing. It's been starting to feel like since the referendum we weren't really being represented in towns around Australia and now it's almost like we're free to be Aboriginal," Mr Burns said.

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He said as a traditional owner, it was always a pleasure to be included.

"That's breaking down barriers too. That's what we're about," Mr Burns said.

The NSW government contributed $900,000 to the Wiradjuri Garden and Dubbo Regional Council contributed $300,000.

Council will also pursue funding for stage two of the garden, which will include interpretive signage.

Mayor Stephen Lawrence said the garden would be an inclusive space for people to meet and have a yarn together.

"This fire pit, the trees and the gardens around us, the rainbow serpent, all of these things are key infrastructure items for our community. They will be tourist attractions, but they are much more than that. In my view they are spiritual and cultural infrastructure for our local Aboriginal community," he said.

"If I have learnt one thing from our Aboriginal community in my time on council it is that spiritual and cultural wellbeing and the key to everything and the key to addressing particularly the social problems that that community is often concerned with and that our council is concerned with too."

A Wiradjuri Tourism Centre will also be constructed on the site.

Dubbo MP Dugald Saunders said the precinct would add a "whole new feeling" for Dubbo.

"It will be for people locally, and people locally will enjoy being able to come to this space, but it will also be one of the things that attracts people to stay in Dubbo a bit longer so they can find out more about our Indigenous heritage," he said.