The instrument is being equated to an "optical dog's nose" which uses a special laser to measure the molecular content of a sample of gas.
"Rather than sniffing out a variety of smells as a dog would, the laser system uses light to "sense" the range of molecules that are present in the sample," said Dr James Anstie, from the University of Adelaide's Institute for Photonics and Advanced Sensing (IPAS).
"There have been good studies undertaken around the world which show that diseases like lung and esophageal cancer, asthma and diabetes can be detected in this way, even before external symptoms are showing," said Anstie.
The system being developed offers almost-instant results, high sensitivity and the ability to test for a range of molecules at once - making it promising for broadscale health screening, resaerchers said.
Anstie and colleagues detailed their use of optical spectroscopy to detect the light-absorption patterns of different molecules, with high levels of accuracy and speed.
Each molecule absorbs light at different optical frequencies and therefore has a unique molecular fingerprint.
"We now have a robust system to be able to detect the presence and concentrations of molecules in a sample," said Anstie.
"The next step is to work out how to accurately sample and interpret the levels which will naturally vary from person to person," said Anstie.
Anstie believes the group will have a working prototype in 2-3 years and a commercial "plug and play" product could be available in 3-5 years.
The study was published in the journal Optics Express.