New South Wales Liberal and National MPs will not be bound by the NSW Coalition's position on the Indigenous Voice to parliament.
It comes as NSW opposition leader Mark Speakman confirmed MPs from both parties will be given the opportunity to freely support either the 'yes' or 'no' campaign.
The decision to let Coalition MPs campaign and vote for or against the Voice based on their conscience was made at the first meeting of the new New South Wales shadow cabinet on Wednesday morning.
"Members will be able to campaign freely for either the yes or no campaign, should they choose, in line with their own views and those of their community," Mr Speakman said.
In announcing the decision, Mr Speakman said the New South Wales opposition was "committed to reconciliation and improving the lives of Indigenous Australians" across the state.
"This is demonstrated in our record investment in government through the National Agreement on Closing the Gap," he said.
"We remain committed to working in partnership with local Indigenous communities to improve decision making and deliver better outcomes."
New South Wales' Coalition position will likely put some state coalition MPs at odds with their federal counterparts, after federal opposition leader Peter Dutton confirmed in April that federal shadow cabinet MPs would be bound by the Liberal Party's 'no' stance.
The decision prompted the resignation of Julian Leeser from the shadow minister for Indigenous Australians portfolio while Calare MP Andrew Gee, whose federal electorate includes the NSW rural regions of Orange Dubbo, quit the federal Nationals last year after the party confirmed its opposition to the Voice.
Elsewhere in the country, Victorian Coalition MPs were permitted to freely campaign 'yes' or 'no' by opposition leader John Pesutto last week, whilst WA Nationals Leader Shane Love and Australia's only Liberal premier, Tasmanaia's Jeremy Rockliff have both expressed their support for the Voice.
The Indigenous Voice referendum will be towards the end of the year after advice from a parliamentary committee examining the wording of the Voice referendum question delivers its report and recommendations to federal parliament.
The committee is due to deliver its report next week.
