The test, which will search for biomarkers generated when bowel cancer starts to develop, promises to be more accurate and sensitive than existing tests.
It is being developed by scientists at the DCU-based Biomedical Diagnostics Institute in partnership with biomedical company Randox Technologies.
It is expected the new test could cost as little as €25.
Because it uses a small amount of blood it is less invasive than existing bowel cancer tests, and it is therefore leading to hopes that it may encourage more people to volunteer to be screened for the disease.
The current national bowel screening programme for those aged 60-69 has had a low uptake.
This is thought to be in part because it involves testing stool samples. Such testing is also considered slow and not entirely reliable.
Survival rates from bowel cancer are higher when the disease is caught early, after a formal diagnosis involving colonoscopy.
It is hoped the new test could lead to earlier diagnosis and a reduced need to send patients for further investigation via colonoscopy.
Bowel cancer is the second most common cause of death from cancer in Ireland.
2,500 people are diagnosed with it each year and 1,000 die from it.
The collaboration is funded by Enterprise Ireland and Randox.
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