Professor Oloyede said that the device, which he calls a "smarthroscope", may be able to reduce the cost of surgery, eliminate unnecessary surgery, and could be useful in developing countries.
It aims to determine the degree and spread of damage to the tissue surrounding an area affected by illnesses such as osteo-arthritis, and other conditions which result in cartilage and bone damage.
The instrument would also help in joint research and for evaluating the effectiveness of established and new methods of joint treatment, acting as a "decision-maker" for surgeons assessing the damage of tissue surrounding focal cartilage damage, to decide how much cartilage needed to be operated on, and to what extent.
Professor Oloyede said at the moment surgeons depended on a subjective assessment of pictorial information obtained using arthroscopes when treating patients, which was not always accurate.
"What we are trying to do is give an accurate picture of what is going on inside the actual tissues," he said.
"We want to accurately assess the area of influence of a focal joint defect in a particular condition to determine the optimal amount of tissue to be removed for replacement surgery, and the area to be prepared for other forms of therapy such as those depending on cell-based procedures.
"If we were able to give an exact map of the cartilage and bone in a degenerating joint, they would then know how bad the condition is, and would be able to treat the right area in the right way."
He said he thought the instrument could also help in developing countries.
"Out there, they do not have as many surgeons who can carry out arthroscopy and make decisions about joint tissue treatment as we do, but this instrument would reduce the dependence on surgical experience and guide them in the process of managing conditions such as osteoarthritis, avascular necrosis and osteochondritis dessicans."
He said he hoped that a mock-up of the "smarthroscope", which is the subject of a QUT-owned patent, would be ready by mid-2009, and an optimised prototype may be possible in three years.