The testing will include working with waste management companies to semi-automate some of the driving they do and also experimenting using electric vehicle technology rather than diesel technology.
Mr Knoche said if they secured the funding it would allow them to scale this kind of testing.
"We start with taking existing vehicles and retrofitting the vehicles and we will have to test that for a certain period of time.
"We will negotiate with our partners that when they happy with the technology it will stay."
Mr Knoche said they had been working with MetService for a project which would test technology to improve driver visibility on Otaika Valley Rd.
Using smart sensors on the road and 3D maps, which will place the exact locations of sign posts; trees; and road markings, drivers will be able to see up to a kilometre ahead compared to GPS which as an accuracy of 5 to 10m.
"If we know from meteorological measurements that we have either flooding here, fog here, or black ice. When you're 500m ahead of it, it will see this is a very dangerous curve you need to reduce your speed to 32km/h." Mr Knoche said.
The technology also includes driver monitoring which will contain information about individuals capability of driving and use that to provide more or less information depending on the driver's skill level.
"What we want to do is first solve a local problem - road safety, dust on roads, these kinds of things - and at the same time build up market intelligence and science on how to solve these problems because these are not only problems for Northland," Mr Knoche said.
If the funding comes through from MBIE it will provide a focus on Northland as an international niche market in heavy vehicle testing digital technology. Mr Knoche said they would like to attract big companies to test their latest technology in Northland.
Mr Studdart said the centre would be a "brilliant opportunity" for employment in Northland creating 100 indirect jobs, such as technicians and researchers, and 15 direct jobs, which would be include engineers and electricians.
On top of this they hope to create internships for young Northlanders.
"It will also give out kids something to aspire to and bring in jobs which are the jobs of the future," Mr Studdart said.
Mr Studdart said they were due to find out if their funding application was successful in June.