Spluttering journeys across Sydney Harbour could soon be a thing of the past after a trial of the city’s first Australian-made and designed electric ferry.

The New South Wales government says contracts have been signed for the new 24-metre, battery electric ferry to be trialled for 12 months from 2028 – two years later than originally planned. It is hoped it will operate on a new Sydney fish market route when it enters passenger service in 2029.

The NSW minister for transport, John Graham, said the trial would inform the transition of Sydney’s entire ferry fleet from diesel propulsion, originally slated for 2035.

“This Northern Beaches-designed, Australian-built ferry will provide a quieter ride and cleaner air on the harbour,” he said.

In 2024, the Minns government announced plans to replace Sydney’s fleet of 40 diesel-powered ferries with Australian-made, electric or hydrogen-powered vessels by 2035, but the start date of the electric trial comes two years later than the project’s proposed start date of early 2026.

Despite the target, the government says no decision has been made about investing in additional electric ferries, which will depend on the success of the trial by Transport for NSW and private ferry operator Transdev.

Transport for NSW coordinator general, Howard Collins, said testing would look at the vessel’s reliability and charging systems, to be installed at Barangaroo wharf, in “real-world conditions”. This will include passenger and crew feedback.

Construction on the trial vessel will begin later this year by Tasmanian shipyard Richardson Devine Marine, which built the seven Parramatta River class ferries which have been launched in stages since May 2024.

The new electric battery ferry is modelled on the same design by Sydney-based naval architects Incat Crowther.

As of January, the River Class vessels, which run on diesel but are designed to be converted to electric propulsion, have fully replaced retiring RiverCat and SuperCat vessels after 30 years of service.

The new Sydney fish market opened at the start of this year, offering everything from flowers, pizza, bánh mì and artisan cheese, but no ferry service. In January, the Sydney Morning Herald reported that marketgoers would have to wait at least a year to travel there by ferry, with plans for a $30m wharf still in the design stage.

The government has committed to net zero emissions across its public transport operations by 2035. Last month it announced that all-electric bus, train and light rail services would run on fully renewable energy from next year under a new $1.9bn deal.

But fossil fuels are still used on most of the state’s public buses, as well as on diesel-powered ferries and intercity and regional trains.

The government has ordered more than 500 electric buses, of which hundreds are already in operation, with 7,500 more expected to fully replace the 8,000-strong fleet of diesel-powered vehicles.

In March, the NSW anti-slavery commissioner found Transport for NSW had not taken reasonable steps to engage with groups affected by the potential use of forced labour in Xinjiang in China and the Democratic Republic of Congo in supply chains for lithium-ion batteries.