Canberra-trained horses have been reinstated to Highway Handicap races in Sydney with Racing NSW reversing its decision on their eligibility.

The governing body said on Monday the change would take effect from September 1 after submissions from trainers who had been barred since last year.

"The Canberra trained horses will now be eligible for Highway races, with NSW country-trained horses that have a benchmark higher than 50 getting first preference for these races, in the rare circumstances that there are more acceptances than the field limit" Racing NSW chief executive Peter V'landys said.

Since December, Canberra-trained horses have been classified as provincial rather than country making them ineligible for the Highway events held in Sydney on Saturdays.

Racing NSW recently met with trainers from Canberra who presented concerns about the ongoing viability of racing in Canberra which would also impact upon their livelihoods.

"The trainers presented a very strong case that action was required to avoid the demise of Canberra's racing industry," V'landys said.

"Racing NSW wants to see that racing in Canberra is viable and strong, as many NSW participants compete in Canberra for prize money that is paid by the Canberra Racing Club, and accordingly Racing NSW does not contribute to this prize money." V'landys said.

"Reverting Canberra-trained horses to country status, with NSW country trained horses being first in the order of entry in Highway races, is a sensible resolution."

To make up for not being able to compete in the Highway races, the club introduced its own version, Federal races, with prize money and bonuses now on offer to NSW country-trained horses as well as locals.

Canberra-trained horses will not be able to compete in this year's inaugural $1.3 million Kosciuszko at Randwick on October 13 because betting has already begun on the race.

The status of Canberra for the 2019 Country/Provincial Championships will be assessed in coming weeks.

Trainers welcomed their return to the fold.

"Thank you @pvlandys & @racing_nsw Board for giving us the chance to explain our predicament. We appreciate you taking the time to listen and we are excited to be once again included in the @tabcomau Highway Series!," Joseph Jones Racing tweeted.