Millions of dollars from the Royalties for Regions scheme will go to driver training and licensing for Aboriginal people in regional areas.
The $5.5 million project is part of a bid to cut high imprisonment rates and a cycle of offending.
The program, which Attorney-General Michael Mischin will announce today, will offer free training and licensing for Aboriginal people in the Kimberley, Pilbara and Goldfields.
Mr Mischin said that, on any given day, 60 Aboriginal people were in WA jails for unlicensed driving.
Attorney-General's Department statistics show at least 301 Aboriginal people were jailed last year after at least one conviction for driving when unlicensed, disqualified or under a fines suspension.
The average jail term was 5.7 months at an estimated annual cost of almost $15 million.
The figures also reveal that 7 per cent of Aboriginal people convicted of at least one road traffic offence were jailed compared with one per cent of non-indigenous offenders.
Mr Mischin said the project was expected to help about 1000 people over the next four years. Under the Aboriginal Justice Program project, Aboriginals in the target areas will be referred to free training and driver tests.
"Driving without a valid licence has been identified as a key pathway into the criminal justice system, particularly for Aboriginal people, who often become trapped in a cycle of offending, fines and imprisonment," Mr Mischin said.
A parliamentary report five years ago found driving offences were a big cause of the over- representation of Aboriginal people in jails and highlighted problems in regional areas.
Shadow Aboriginal affairs minister Ben Wyatt, who headed the committee that tabled that report, said he welcomed the long overdue project.
"The inability of Aboriginal people to access a driver's licence is a major impediment for their participation in employment," Mr Wyatt said.
Aboriginal Legal Service chief executive Dennis Eggington and elder Robert Isaacs, a Justice of the Peace for more than 30 years, applauded the project as a step towards reducing Aboriginal imprisonment.