It will also only involve student visa holders who have been fully vaccinated with the shots approved by the Therapeutic Goods Administration, which at the moment includes Pfizer, AstraZeneca and Moderna.
It means students will initially come from countries such as Singapore, Hong Kong, Malaysia, Japan, Thailand and the US, but not from the key markets of China and Nepal.
Deputy NSW Premier John Barilaro said the pilot would expand as vaccination rates rise
“The international education sector sustains thousands of jobs across NSW, and I’m proud that NSW is leading the way with the return of international students to our shores,” Mr Barilaro said in a statement.
The plan will not come at the expense of any Australian citizen or resident wishing to return home, he added.
The Redfern quarantine facility has capacity for 650 students under COVID-safe standards that have been approved by NSW Health and NSW Police, the government says.
The governor of the NSW Vice-Chancellors’ Committee, Professor Barney Glover, welcomed the announcement.
"After over 18 months of planning, we are delighted that both the Australian and NSW Government are supportive of a pilot plan for an incremental reopening of our borders to our international students," he said in a statement.
Council of International Students Australia President Belle Lim said students are looking forward to returning.
"We all want international students back on campus, enjoying the unique learning, work and life experience that only studying in Australia can deliver," Ms Lim said. "We support the cautious approach and look forward to growing the number of students returning to NSW over time."
Universities involved in the pilot program include Western Sydney University, Macquarie University, The University of Sydney, UNSW, UTS, Australian Catholic University, The University of Newcastle and the University of Wollongong.
Independent providers are also involved, including the International College of Management Sydney, Kaplan, Navitas, RedHill and Study Group.
The international education sector in 2019 was Australia's fourth-largest export, contributing $37.6 billion to the Australian economy and $14.6 billion to NSW.
A similar pilot involving 250 student arrivals per fortnight from August was put on ice earlier this year after the state's Delta COVID-19 outbreak.