Developed by a team at the University of Akron in Ohio, the contact lens can sense glucose, which is the blood sugar in tears, and reveal the information in the blink of an eye.
If sugar is not being metabolised properly and glucose concentration builds up in the body, the contact lens will detect a problem and change colour, the researcher said.
"It works just like pH paper in your high school chemistry lab," said Dr Jun Hu who led the study.
"The sugar molecule literally acts like the proton in a pH test, displacing a colour dye embedded in the lens, and the lens changes colour," Hu was quoted as saying by 'Daily Mail'.
Usually when sugar dissolves in water one can't see them. But, Dr Hu has used a molecule, called a probe, which binds well to sugars that they then combined with a dye. When sugar concentrations rise, the sugar binds to the probe and knocks the dye loose, causing a colour change.
The person wearing the lens wouldn't notice the change unless they looked in the mirror. Thus, the researchers are now designing an app that will calculate sugar levels from a camera phone snap of the eye.
"This device could be used to detect subtle changes in blood sugar levels for tight management of diabetes. It can also be used to identify patients with pre-diabetic conditions allowing early diagnosis that is crucial for preventing diabetes from advancing," Dr Hu said.
Hu said: "The convenience of contact lenses could boost patient compliance to blood sugar testing, as it will reduce discomfort, inconvenience, and even cost.
"In addition, blood sugar also changes rapidly throughout a normal, active day, so a device that can monitor glucose many times in a day will provide diabetic patients with a very powerful tool in combating such a damaging condition."
The lens is currently at the prototype phase but the team hoped if all goes well, it could be commercially available within three years.