Run in conjunction with the organisers of the popular Just Send It series, the Erebus competition will be split into two age groups – 13-15 and 16-18.
Time trails will be held on May 14 and 15, with competitors driving the VF Commodore Supercar and the Legends 34 Coup at the Okayama and Summit Points circuits.
The best 40 from each age group will qualifying for the races on May 16.
Erebus drivers and accomplished sim racers Anton De Pasquale and Brodie Kostecki will be part of race control team, with the competition to be broadcast live on Twitch.
Prizes include a full day of training at the Norwell Motorplex in a Toyota 86 racing car for the older age group, and a day of training in a race-prepped kart with Sera Driver Development for the younger age group.
"We see this as a great opportunity to introduce a younger demographic to our sport in the current climate," Erebus CEO Barry Ryan said.
"While we’re not racing in the real world, we are in a really fortunate position where we can still engage with our fans and give them an opportunity to race in front of us.
"iRacing isn’t something unfamiliar for us, with an in-house simulator used as part of our drivers' training in the lead up to many events."
De Pasquale added: "It’s such a cool initiative from the Erebus Academy and something I am really looking forward to help steer.
"I particularly enjoy working with the younger kids because they are really eager to learn and, to be honest, I get as much out of it as they do.
"I’ve been really fortunate to have had a lot of people help me with my career and take an interest in me and I’ve been involved with the Erebus Academy and driver training at Norwell for a number of years now, so it’s an extension of getting kids involved in motorsport, just in another way."
Entry, which is free, will be open via the team's website until 11:59pm AEST on May 10.