It's hoped the hand held 'Bio Pen' will help improve precision during surgery and speed up recovery times for patients.
The handheld device is designed to help surgeons draw human tissue onto damaged bones.
Researchers say it represents a big innovation in orthopaedic surgery.
It works like a 3D printer, building up layers of the patient's own stem cells to create a 'living implant' constructed during surgery.
Live cells are contained within a substance called alginate, a seaweed extract. The alginate helps support the cells as they grow.
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"Each implant is actually created by the surgeon in the surgical environemnt, and that means we can tailor it to make sure that he optimal performance is delivered through that implant," Gordon Wallace at the University of Wollongong says.
Surgeons hope the innovation will help speed up recovery times, particularly in young people with sporting injuries.
"Knee injuries to the cartilege are often associated with other injuries, for example to ligaments on the football field or the soccer field," says Peter Choong, Professor of surgery at St Vincent's Hospital. "So you know you have thousands of students and children every year playing all these sports and some of them do get injured. The potential field is quite significant in the young."
The biopen is currently being optimised to help repair damaged cartilege, but one day researchers hope it will also be used to help repair damaged bone and muscle.
The device was created at the ARC Centre for Excellence in Wollongong using 3D printing technology.
"It's also opened up our ability to confront very fundamental biological questions and we didn't have that ability just a few years ago."
The Bio Pen is still in the development phase, with clinical trials to start within the next few years.
