University of NSW researchers will work with the hospital patients to examine what effects vapourised cannabis leaves and a form of pharmaceutical cannabis medication will have on people who are dying of cancer and suffering symptoms including fatigue, nausea and insomnia.

Premier Mike Baird and Minister for Medical Research Pru Goward announced on Monday that the trial would be undertaken by palliative care specialist Meera Agar, who is also a conjoint associate professor at the University of NSW.

Associate Professor Agar said the trial was exciting because it would first of all examine whether vapourising cannabis leaf would allow the beneficial effects of cannabis on appetite to be very quickly felt by the body, but without some of the toxic side-effects of inhaling smoke.

"This is a question that is very important to the people that are providing clinical care, because consumers have said it is the clinical issue that really distresses them," she said. "It's such an important area of care for people with cancer - food is a social event, it's not just a clinical issue, so it's a much more far-reaching problem than the other clinical issues we deal with on a day-to-day basis".

Three trials, costing $9 million all up, were announced in December last year by Premier Mike Baird after the tireless campaigning of Dan Haslam, who died in February from bowel cancer, and his family, along with other people with medical conditions that could benefit from access to the drug.

Fairfax Media reported last month that a private donation to Sydney University of more than $30 million will allow further research into the medical applications of cannabis.

As well as the Newcastle trial for people with terminal cancer, the effects of the drug will be examined in children with severe, drug-resistant epilepsy and adults with nausea from chemotherapy.

Mr Baird said the trials would position NSW as a world-leader in research into cannabis and terminal illness as well as help alleviate suffering.

"We do not want patients or carers having to play pharmacist - that is why it is so important to explore the safest and most effective ways we can deliver compassionate care and improve the quality of life," he said.

Associate Professor Agar said her trial would comprise two parts. First, the group of 30 patients would be treated using the vapourised leaf to measure the effect on their symptoms.

Then the team would test between 250 and 300 people in a bigger trial that would also use a pharmaceutical cannabis medication in tablet or liquid form

It would also assess whether patients put off by the idea of using cannabis found it more acceptable.

"It wouldn't be every patient [who enquires about cannabis], but it is very common, especially for symptoms for which there aren't other treatments that are very efficacious," she said.

"But equally, there is a group of patients that will be very hesitant ... especially elderly people who might be just as troubled by appetite problems but might be less willing to give it a go".

"If it does actually work we want it to be accessible to everyone".

The cannabis drug could be developed by an existing medical cannabis drug manufacturer, based on the results of the first stage of the study, or the team might develop the product themselves, she said.