A new veterans' brain bank will help uncover the impact of traumatic head injuries on defence force service personnel.

The Australian Veterans' Brain Bank, launched on Monday, is the first of its kind in the country and will be based at Concord Hospital in Sydney's inner west.

Veterans are encouraged to donate their brains for study, in the hope of diagnosing past issues and improving care for current service personnel.

Past research has pointed to the potential degenerative effects in the brains of soldiers who have been subjected to repeated explosions.

Royal Prince Alfred Hospital's Head of Neuropathology, Associate Professor Michael Buckland who is helping lead the study, said brain injuries detected in some former soldiers were similar to those of athletes playing high level contact sports.

"The injuries we're really interested in would be blast-type injuries, either from IEDs (Improvised Explosive Devices), which is apparently one of the most common injuries in the Afghan and Iraq wars," Dr Buckland told AAP.

"Or even from people shooting artillery or firing rockets, all that sort of stuff.

"Those blast-type injuries seem to be quite detrimental to the brain particularly if you're exposed to a lot of them - just like taking lots of big hits in football."

High rates of participation in contact sports and head knocks during training are also other risk factors for trauma facing veterans.

Similar studies overseas have found a small number of veterans exposed to blasts developed chronic traumatic encephalopathy (CTE), a condition most often associated with professional football and boxing.

CTE is a degenerative brain disease characterised by the accumulation of an abnormally folded protein called "tau", which can only be detected at autopsy.

Dr Buckland noted rates of CTE in soldiers were far lower than in professional footballers, according to studies done in the US.

The early stages of CTE can manifest in a similar way to a range of mental health issues experienced by veterans, such as PTSD, depression, anxiety, impulse control, aggression, drug and alcohol abuse.

"The whole point of the Veterans Brain Bank is really to start looking and to start working out how much of these issues is due to an organic brain disease, such as CTE, and how much is due to psychological issues like PTSD," Dr Buckland said.

"In the US the data so far seems to indicate that it's only a minority of cases that could be attributable to CTE, but that's only preliminary and there's still a lot of work to be done."

NSW Health Minister Brad Hazzard said the new brain bank would lead to better health outcomes for current service men and women.

It will also provide more accurate diagnoses for loved ones of late veterans who have pledged their brains to research, according to Mr Hazzard.

"The establishment of the Australian Veterans' Brain Bank is a significant step forward in advancing the understanding of the long-term effects of head trauma among veterans," he said.

The new brain bank will work in partnership with the National Centre for Veterans' Healthcare (NCVH) and act as a sister organisation to the Australian Sports Bank.

The bank is a collaboration between the NCVH, which offers specialised health care for veterans, and RPA Hospital's Neuropathology Department.