Spearheaded by business owner Chris Watson, the Stay Regional, Shop Regional gift card has been given the tick of approval and $20,000 in financial support from Tamworth Regional Council.

And, with Christmas just around the corner there's no better time for small businesses to jump onboard, Mr Watson said.

"I think it's great for smaller businesses who don't have access to the technology to do their own," he said.

"The consumer can buy one and rather than be limited to one shop, they can use it at multiple which makes it a nice feel good for someone who's not sure what to buy but wants to support local business."

The card itself is expected to be on sale by December 1, and each gift card will be valid for three years to be used at any participating shop.

The concept has taken off in other regional towns like Bathurst and Narrabri and also has the financial backing of the local business chamber.

It's an excellent idea given the financial strain of the drought and COVID-19, TRC acting mayor Phil Betts said.

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"There's certainly a mixed bag locally because some have done well through COVID-19 but there's a vast number of businesses who have really done it tough," he said.

"We need to keep the momentum and this program will really encourage people to shop locally."

Shops from across the region are invited to participate in the project.

Designer Bunches owner Jan Fagan said she felt the gift card was a great idea.

"It encourages people to rethink their buying habits, they might think about going online and they can choose what they like and it's available for three years," she said.

The cards will be available online.