Dallas and Los Angeles in the United States will also be pilot cities.
Uber said increased air mobility would help ease traffic congestion in cities.
"This is a trip that so many travelers make a day, and we see an opportunity to save them a huge amount of time on it", Eric Allison, head of Uber Elevate, told The New York Times.
Centre for Urban Research expert Chris De Gruyter was sceptical about whether Uber Air can can solve transport problems.
The company is on track to start testing the flying taxi service next year before the commercial deployment for the public in 2023.
"Australian governments have adopted a forward-looking approach to ridesharing and future transport technology", said Susan Anderson, regional general manager for Uber in Australia, New Zealand and North Asia.
Uber is working with Nasa and the US Army on its flying taxis and has two aircraft manufacturers - Embraer and Pipistrel Aircraft - also on board.
"Uber's technology is changing the way people move around their cities - from bikes to pooled rides, we are always looking for ways to reduce the need for private auto ownership".
The plan is for the electric aircraft, accredited by CASA, to take off and land vertically from a network of landing and take-off pads dubbed "skyports".
Uber Air" "skyports' will likely spring up atop the vehicle parks of Westfield shopping centres.
"In the coming years, with Uber Air, we want to make it possible for people to push a button and get a flight", he said.
If the trial is successful, Uber plans to introduce the service to Sydney, offering flights from the CBD to the Central Coast.
Last year, Uber revealed the worldwide cities it was considering for launching the aviation project.
Uber also revealed and air taxi cabin design in collaboration with French engineering group Safran.
Although Anderson said the Victorian government has been "highly supportive", Uber's breakthrough into the state was not met without regulatory troubles. "Uber Air will be a mass-market product serving daily and casual commuters as an alternative to driving into and out of congested urban areas", the submission read.
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