The NSW government will waive the waste levy for asbestos disposal to discourage people from illegally dumping the deadly material.
Environment Minister Robyn Parker says the $3 million, 12-month trial will also reduce tip fees in participating council areas.
The move comes as increasing numbers of home renovators undertake work on homes built before 1987, Ms Parker says.
"This trial will pilot innovative approaches to increase the lawful disposal of asbestos and discourage illegal operators by reducing the financial advantage," she said in a statement on Thursday.
The pilot scheme is now open for expressions of interest and will run at selected councils in 2014.
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The EPA will contribute $50 per tonne to the cost of removing and transporting wrapped bonded asbestos disposed of as part of the scheme.
In June, a ute full of asbestos was illegally dumped out the front of a Sydney childcare centre, sparking outrage from parents.
