The move to a digital platform will make it easier for boaters, who can now access or renew their licence within minutes.
Boaters who choose to carry only a digital licence must ensure their device remains charged and accessible, while digital licences can be accessed on another smartphone or tablet by securely signing into the Service NSW app.
The only exception is for personal watercraft licence holders who need to carry physical licences when out on a jet ski, as photo identification is required.
Minister for Finance, Services and Property Victor Dominello said the government issues more than 23 million licences and permits each year, covering more than 760 different categories.
“This means customers could be carrying up to six different government licences or permits in their wallet at any one time,” Mr Dominello said.
“By removing paperwork and embracing technology we are providing customers with a product that is fit for purpose in the digital age.”
More than 30,000 digital licences have been downloaded since the digital licence platform launched last year.