WooCommerce Select Dropdown With Optgroup On Checkout

Solution:

You can do it in 2 ways:

1) Enabling <optgroup> in Woocommerce select form fields, you can use from GitHub:

2) Enabling <optgoup> manually in a select field like:

add_action('woocommerce_before_order_notes', 'custom_checkout_select_field_with_optgroup', 10, 1 );
function custom_checkout_select_field_with_optgroup( $checkout ) {
    $domain  = 'woocommerce';
    $title   = __("Region", $domain);
    $slug    = sanitize_title($title);
    $default = __("Select your region", $domain);
    $value   = $checkout->get_value($slug);

    // Region option data array with optgroup
    $options = array(
        __("North Region", $domain) => array(
            'region1' => __("Region 1", $domain),
            'region2' => __("Region 2", $domain),
        ),
        __("South Region", $domain) => array(
            'region3' => __("Region 3", $domain),
            'region4' => __("Region 4", $domain),
        )
    );

    // The field
    echo '<p class="form-row form-row-wide '.$slug.'-dropdown" id="'.$slug.'_field" data-priority="">
    <label for="'.$slug.'" class="">'.$title.'</label>
    <span class="woocommerce-input-wrapper">
    <select name="'.$slug.'" id="'.$slug.'" class="select " data-placeholder="" autocomplete="'.$slug.'">
    <option value="">'.$default.'</option>';

    // Loop through "optgroup"
    foreach( $options as $optgroup_label => $optgroup_options ) {
        echo '<optgroup label="'.$optgroup_label.'">';
        // Loop through "options" in the "optgroup"
        foreach( $optgroup_options as $key => $label ) {
            $selected = $value === $key ? ' selected="selected"': '';
            echo '<option value="'.$key.'"'.$selected.'>'.$label.'</option>';
        }
        echo '</optgroup>';
    }

    echo '</select></span></p>';
}

Code goes in functions.php file of your active child theme (or active theme). Tested and works.