After doing much searching of the internet I have come up with this solution. This solution will enable Wayland even if you have proprietary NVIDIA drivers on Ubuntu 20.04.
sudo apt install gnome-session-wayland.
/etc/gdm3/custom.conf and ensure
WaylandEnable=false is commented.
/usr/lib/udev/rules.d/61-gdm.rules and comment all lines.
sudo systemctl restart gdm3.
- Click on the cogwheel and select GNOME or Ubuntu on Wayland.
echo $XDG_SESSION_TYPE in order to confirm you are running Wayland (output should be "wayland").
This solution can be a bit buggy, for example the Ubuntu environment took a long time to fully load in my case. In my case I am running a GTX 1050 Ti on proprietary drivers.
EDIT: Performance in games is terrible if running this solution. Would not recommend for gaming.