Premier Mike Baird says terminally-ill patients who use cannabis to relieve their suffering will soon be exempt from prosecution.

Terminally ill patients will soon be able to use cannabis without fear of being charged in NSW, as the Baird government moves closer to legalising the drug for medical use.

Premier Mike Baird, who made the announcement on Tuesday, said he was moved to act after meeting cancer patient Daniel Haslam, who has been using the drug illegally to relieve his suffering.

Under the measures, NSW police will be allowed to exercise discretion not to charge terminally-ill adults who use cannabis.

Mr Baird said the move formalises what police are already doing.

“We want to give the terminally-ill, their carers (and) their families greater peace of mind,” Mr Baird told parliament.

“We also want to ensure that carers aren’t forced to watch their loved ones suffer when their pain can be alleviated.”

Mr Haslam’s mother Lucy travelled to Sydney from Tamworth, in northern NSW, for the announcement.

She told reporters she was “elated” the government had thrown its support behind the medicinal cannabis cause and said she hugged the premier after he told her what he was about to announce.

Her local member, Nationals MP for Tamworth Kevin Anderson, was expected to introduce a private member’s bill this week to legalise medicinal cannabis.

But Mr Baird says there are still concerns about the drug’s supply and distribution.

He has directed a working group to conduct a clinical trial for medical cannabis to look at those concerns. The group is due to report back by the end of 2014.

Mr Anderson has lauded Mr Baird’s announcement as “groundbreaking”.

The announcement adds momentum to a growing national push to legalise cannabis for medicinal use.

Victoria’s parliament is due to debate a bill to make it easier to conduct clinical trials for medical cannabis, and West Australian Health Minister Kim Hames has called for national trials.

Meanwhile, Queensland federal MP Warren Entsch is drafting a bill to allow for legal trials of cannabis to treat people with cancer, epilepsy and multiple sclerosis.

But Mr Baird stressed that cannabis remained an “illegal and dangerous drug”.

“These reforms are about compassionate care,” the premier said.

“Recreational use of drugs is illegal and will not be tolerated.”

The NSW opposition earlier announced it would back moves to change legislation to provide a “complete defence” from arrest and prosecution for the terminally-ill who use cannabis for medical reasons.