Singapore Airline's (SIA) long-haul budget carrier Scoot has unveiled Sydney as its first destination for daily service.

Scoot, which will fly from Changi Airport's Terminal 2, has said it will offer airfares of up to 40 percent cheaper than those of full-service carriers.

For a start, Scoot will operate just one flight to and from Sydney daily, when it begins operations in June next year.

This will make it the only long-haul budget carrier to fly direct to Sydney.

The announcement was made Thursday morning by the Premier of New South Wales Barry O'Farrell at a media conference in Sydney.

Other budget carriers such as Jetstar and Air Asia X -- which fly to other Australian destinations -- do not fly to Sydney at the moment.

Scoot will fly using Boeing 777 aircraft, so this means an extra 400 seats on the Sydney route each day.

Mr O'Farrell said Scoot's presence will inject AUD146 million into the New South Wales economy each year.

Given Changi Airport's position as an aviation hub, he said Scoot's presence will help Sydney reap benefits of budget travel in emerging markets like Singapore, China and India.

NSW Minister for Tourism George Souris said Scoot chose Sydney ahead of strong competition from Victoria and Queensland.

Singapore currently represents Australia's sixth-largest international tourism market.

Visitor arrivals from Singapore to New South Wales, in the year ending June 2011, hit 92,200 - a rise of 16.8 percent on 2010.

Scoot will be the first airline to fly to Sydney under a partnership agreement between Destination NSW and Sydney Airport to promote Sydney actively to new airlines and compete for new routes.

Scoot chief executive officer Campbell Wilson said he is "absolutely delighted" that Sydney will be Scoot's inaugural destination.

"As the first, true no-frills airline operating between Sydney and Asia, we can't wait to bring a whole new way to travel, even better airfares and our unique attitude -- our 'Scootitude' -- to shake things up. Sydney, here we come," Mr Wilson said.

As part of the partnership, Destination NSW will be also be working with Scoot, Sydney Airport and Tourism Australia on a two-year joint marketing plan to promote the new service.