The education-style app, named Everyday Racism, challenges players to live a week in the life of an Aboriginal man, a Muslim woman, an Indian student or yourself.
Various scenarios based on evidence are provided and players must decide how to respond to the situations in the most effective way.
Priscilla Brice is the managing director of All Together Now, the charity group that launched the app.
Ms Brice says while anti-racism apps exist overseas, the app is the first to combat the issue in Australia.
Listen: Interview with Priscilla Brice
Ms Brice says a 2011 study by the Foundation for Young Australians found that 7 in 10 young people regularly experience racism.
She says the app is being targetted at 18 to 24-year-olds, in the hope of changing their attitudes.
"We want to raise awareness and get people to undertand the types of things that they can do when they witness racism and what racism is really like," she said.
"The other thing is that some of the data does show that racism is on the rise in Australia but we don't know whether that's the case or not. So the statistics say more people are reporting racism but we're not sure whether that's because racism is increasing or if it's because more people are learning what racism is and so more people are reporting it."
