The fund will replace the NRMA-ACT Road Safety Trust, an arrangement between the ACT Government and NRMA Insurance which ended as a result of additional compulsory third party insurers entering the ACT market.

That Trust was funded by a $2 levy included in vehicle registration costs in the territory, which was matched dollar-for-dollar by NRMA.

With the new fund, motorists will hand over an extra 50 cents as part of the road safety contribution in their registration payments.

"Since 1998 motorists have been making a contribution to the NRMA-ACT Road Safety Trust when paying their ACT motor vehicle registration, which was set at $2 in 2003," Minister for Justice Shane Rattenbury said.

"For vehicle registrations commencing on or after July 1, the contribution will be increased to $2.50. This will ensure the new road safety fund has sufficient resourcing for an annual grants program and other key road safety initiatives."

The new ACT Road Safety Fund will building on the work of the outgoing trust and maintain funds to allow the government to continuing delivering road safety initiatives across the territory in support of the government's identified road safety strategy, Mr Rattenbury announced on Thursday.

Mr Rattenbury said the new fund would be supported by an advisory board made up of independent road safety experts, representatives from local compulsory third party insurers, road user representative groups, and ACT government representatives.

The board will make recommendations about the application of the new fund, including the allocation of grant funding for road safety initiatives.

Legislation will be introduced into the Legislative Assembly to repeal the NRMA-ACT Road Safety Trust Act 1992.

Following the repeal of the act, the trust will continue to operate in accordance with its existing Deed of Trust, for the purpose of managing funded projects and use up any leftover trust funds.