Red blood cells grown from stem cells could go for trials in the next three years.
If the trials proved to be successful, it would pave the way for an alternative to the use of donated blood for transfusions.
The method, however, comes with risks including infection or rejection by the receiver's body.
A team of researchers from across Ireland and the UK, led by the Scottish National Blood Transfusion Service, would now be granted over Ä6 million in funding to carry out further research after successfully growing red blood cells from stem cells.
The research had also drawn participation from The Irish Blood Transfusion Service.
The Wellcome Trust awarded the funding to the researchers yesterday.
According to principal investigator, professor Marc Turner, developing such a therapy that could be used by humans was a ''very significant challenge,'' www.thejournal.ie reported.
He added, if success could be achieved with the first-in-man clinical study it would mark an important step forward to enable populations all over the world to benefit from blood transfusions.
Other researchers working on similar cellular therapies would also benefit.
Meanwhile, the first volunteers are expected to be treated by late 2016.
According to experts, blood cells freshly made in the laboratory would have a longer life span than those taken from donors, which typically lasted no more than 120 days.
The cells would also be free from infectious agents such as viruses or the rogue prion proteins that caused Creuzfeldt-Jakob Disease (CJD).
HeraldScotland quoted Turner as saying the developments would also provide information of value to other researchers working on the development of cellular therapies.
The pilot study would involve no more than about three patients, who might be healthy volunteers or individuals suffering from a red blood cell disorder such as thalassaemia.
The patients would receive a small, five-millilitre dose of laboratory-made blood to see how it behaved and survived in their bodies.
The blood cells would be created from ordinary donated skin cells called fibroblasts, genetically reprogrammed into a stem cell-like state.
The resulting induced pluripotent stem (iPS) cells had the same ability as embryonic stem cells to develop into virtually any kind of body tissue.