New ear tag technology will be used in Victoria and will utilise GPS to track livestock on mobile devices and computers and send texts to farmers if cows stray or are stolen.
Launched at Kelly Angus, Yea agritech company Smart Paddock will trial the new ear tags, called Bluebell, which are reusable and battery free.
Smart Paddock chief executive Darren Wolchyn said there was a growing demand for farming data which in turn will lead a shift away from "factory farming".
"Our vision is to transform traditional farms to highly productive, environmentally and ethically forward thinking without resorting to factory farming," Mr Wolchyn said.
The Victorian Government investment company Breakthrough Victoria will invest $500,000 in the company to help the development of the Bluebell ear tag further and expand production.
The ear tag is workable over many days, and uses a super capacitor to store energy, which allows the tag to run even without sunlight exposure.
"We know our technology is revolutionary - this investment by Breakthrough Victoria and continued investment from Telstra will help us keep our manufacturing in Victoria," he said.
"We can further develop our product to give farmers even more advanced data to inform their decision making, increase productivity and the health of their livestock."
The amount of data gathered can allow farmers to review pasture usage, monitor the activity levels and see how far their animals are walking each day to access food or water.
The ear tag also has technology which will send a farmer a text if an animal is moves unusually on a property, which could be added protection during a theft.
Breakthrough Victoria chief executive Grant Dooley said the ear tag has potential to be used worldwide.
""Smart Paddock is exactly the sort of company Breakthrough Victoria is looking to invest in, [and it is] breakthrough innovation and technology manufactured in Victoria and supporting Victorian jobs," he said.
"Ag-tech is a priority area for Breakthrough Victoria, and we see enormous potential in Smart Paddock to have a significant impact on the livestock farming industry in Australia and around the world."
Earlier this year an outbreak of foot and mouth disease in Indonesia had heightened concerns among the agriculture industry.