The AI has been designed to work in all weather conditions, NSW Transport says
The detection network will be expanded to 45 AI-equipped cameras by 2023, according to NSW Transport.
The authority said it believed the detection system was a world first.
It uses high-definition cameras to take photos of the front-row cabin space of vehicles, in "all weather conditions".
"Images that the automated system considers likely to contain a driver illegally using a mobile phone are verified by authorised personnel," NSW said on a web page about the cameras.
Following the three-month warning period, drivers caught by the cameras will receive penalty points and a A$344 (£180) fine, or a A$457 fine in a school zone.
In the UK, Thames Valley and Hampshire police launched a system earlier this year that can detect mobile phone signals coming from road vehicles.
However, it cannot tell whether drivers or passengers are using the phones and so is not being used as an enforcement tool.