Biotechnology firm Xing Technologies is working on the test, called XavTrap, after being allocated $1.5 million in Queensland government funding for its research.

Researcher Dr Yadveer Grewal explained how the test works.

A cheap and simple baker's yeast is coated with hook-like particles to trap the virus just like velcro.

That yeast is then combined with strip technology used in pregnancy tests to rapidly determine whether a person has the virus.

"That way someone could have a nasal swab taken, apply it to a strip and within five to 15 minutes, depending on how infectious they are, get a result then and there," he told Nine's Today program.

Currently, there's a risk high-quality nasal swab lab tests can produce double negatives.

But Dr Yadveer said his test, called XavTrap, could still be effective even though it was less sensitive.

The United States Food and Drug Administration, which is also backing the project with $US1 million, believes the sensitivity and price of tests can be lowered if people using them get tested more frequently, he added.

Dr Yadveer used the example of doctors and nurses using Xing's test every time they started a hospital shift and getting a fast result.

"Testing yourself every couple of days is about equivalent to having a once-off high-quality specific test from a lab," he said.

Another difference between XavTrap and other tests is that it discriminates between live and dead viruses, so it's less likely to result in false-positives.

Xing Technologies is hoping to have its new COVID-19 test on the market by the end of 2020 and also eventually hopes to use XavTrap to test for other infectious viruses like dengue fever, and even cancer

"Ideally then, we are able to manufacture immediately by the end of the year and distribute it," Dr Yadveer said.

"Because of our technology is easily programmable we have other lead candidates we are exploring, and they can come online early next year."

Australian Associated Press