Australia will lift a five year ban on animal-to-human transplant trials at the end of 2009, the National Health and Medical Research Council said on Thursday.
The council said developments in science and technology since the xenotransplantation research ban was introduced in 2004 meant the risk of transmitting animal viruses was now low.
The risks, if appropriately regulated, are minimal and acceptable given the potential benefits, it said in a statement.
Australia will join some 14 other countries -- including Japan, New Zealand and the United States -- in allowing xenotransplantation, the transplanting of animal organs and cells into humans to substitute for human organ donors and to treat diseases like diabetes.
The Australian moratorium was introduced in 2004 based on concerns that research in the area could prompt animal viruses, particularly pig viruses, to jump the species gap into humans.
The World Health Organization has called on countries to establish regulatory control and surveillance mechanisms before allowing xenotransplantations.
Australia will introduce new regulations to control clinical xenotransplant trials, impose an oversight and monitoring strategy and establish a patient register, said the council.
Australian biotechnology firm Living Cell Technologies Ltd said on Thursday it now hoped to expand its clinical trial programme into Australia.
This decision opens up significant opportunities not only for LCT, but for the wider medical science community and people with life threatening diseases, Dr Paul Tan, LCT's chief executive officer, said in a statement.
LCT is conducting xenotransplantation trials in New Zealand. Earlier this month it said had reduced the daily need for insulin in a 48-year-old New Zealand diabetes patient by 30 percent by injecting him with insulin-producing cells from a pig.
It said the treatment of Type 1 diabetes may become commercially available as soon as the last quarter of 2011.
Type 1 diabetes occurs when the pancreas does not produce enough insulin. More than 20 million people worldwide suffer from the disease, according to the World Health Organization.
A further seven patients will take part in the New Zealand trial. Living Cell is also in the animal trial stage of using pig cells as a treatment for Parkinson's Disease.