New South Wales Labor has committed to starting treaty discussions with Indigenous communities if elected in March.

It will commit $5 million towards a year-long consultation on the legally binding agreement between the government and Indigenous Australians, which allows for partnership around decision-making.

But Labor leader Chris Minns said the consultation process will begin after the referendum on the Voice later this year— and will go ahead regardless of the outcome.

"I think it'll be a big challenge and it's not going to be a straight line, but we've got to start that process," he said.

"We cannot be one of only two states in the entire country that hasn't begun a process to treaty in Australia."

NSW has the largest population of First Nations peoples in the country.

But unlike almost all other states and territories, it's yet to take formal steps towards a treaty.

The process will determine whether First Nations communities want a treaty or agreement-making process, and if so, what that would look like.

It's a commitment the opposition also took to the 2019 state election.

The NSW Aboriginal Land Council's Dr Anne Dennis believes it's a step in the right direction.

"The pathway to treaty will really clearly define how we're going to work together in the future and keep working," she said.

"We ask the people of New South Wales, we ask the people of Australia to get behind and support this."

Mr Minns insists a treaty process will be led by First Nations communities from the outset.

"This is about making decisions … with the Aboriginal community, not just for the Aboriginal community," he said.

"When you partner with Indigenous organisations and First Nations leaders, you're getting better outcomes."