NSW will open the first Australian centre dedicated to diagnosing and treating children damaged by their mother's drinking during pregnancy, under an election commitment from the Liberal government.

Doctors say fetal alcohol spectrum disorders are a hidden driver of intergenerational poverty and disadvantage in the state, with many children going undiagnosed or misdiagnosed and, tragically, their mothers are then having more children with the condition because they simply do not realise the impact their drinking is having.

The new clinic will be run at Westmead Children's Hospital, where a successful pilot program is already being run.

Professor Elizabeth Elliot, a consultant paediatrician at the hospital, said the pilot already had a long waiting list as word spread that the service was available, with many children who are living in foster care being referred for help.

In Australia, about 3000children are believed to be born every year with serious physical, intellectual and behavioural problems – including memory problems and facial deformities – caused by drinking during pregnancy. Professor Elliot said it was likely the problem was being underestimated, with recent US estimates that up to 5 per cent of the population there is effected.

"It can result in problems with attention and hyperactivity or learning, or even the development of some features consistent with the autistic spectrum, so they just get labelled with those symptoms," she said. "We really need to get them help to enable them to be the best they can be … but also to prevent the mother having another affected child."

She said many children living in foster care had been removed because of their parents' drinking, yet they were not assessed for the disorder. They should be screened, along with the children of women who were dependent on alcohol and the siblings of children already diagnosed.

NSW health minister Jillian Skinner said the statistics on the impact of alcohol on children were alarming.

She pledged to spend $2.3 million on the new centre, which would incorporate an existing pilot clinic, to diagnose and support children exposed to alcohol in utero. It would also develop treatment plans for those children.

"There are a number of clinicians undertaking life-changing work in this field … know this funding will assist them to better understand this disease, which affects thousands of Australians," she said.

As many as 51 per cent of women admit to drinking during pregnancy. The centre would also train health providers on how to educate their patients on the risks of alcohol.

Caterina Giorgi, the director of policy and research with the Foundation for Alcohol Research and Education (FARE), said the new centre would make a "significant change" to the lives of people with FASD. "We have parents and carers calling up all the time asking where they can go and how do they get help," she said. With nowhere else to send them, her group referred these callers to support groups. "It's very hard."

Ms Giorgi said the pilot centre, which was funded by FARE, had tested the use of a multi-disciplinarian teams to diagnose fetal alcohol spectrum disorder.

She said early diagnosis was important. "If you diagnose it early, you can develop an ongoing management program."

The use of a multi-disciplinary team to diagnose fetal alcohol spectrum disorder was also used recently in Fitzroy Crossing as part of a major study. It found one in eight of all seven- to nine-year-old children in the remote town had been damaged by drinking during pregnancy.