Two doctors from Japan and Britain have been awarded this year's Nobel Prize for Medicine for their groundbreaking work on stem cells.

Shinya Yamanaka and John Gurdon have been developing a process called nuclear programming, which turns adult cells back into stem cells.

The jury awarding the prize said the pair's findings have revolutionised our understanding of how cells and organisms develop.

"The discoveries of Gurdon and Yamanaka have shown that specialised cells can turn back the developmental clock under certain circumstances," the Nobel Prize Assembly said in a press release.

"[They] have created new opportunities to study diseases and develop methods for diagnosis and therapy.

"For instance, skin cells can be obtained from patients with various diseases, reprogrammed, and examined in the laboratory to determine how they differ from cells of healthy individuals."

Scientists hope stem cells can be coaxed into growing into replacement tissue for victims of Alzheimer's, Parkinson's and other diseases.

In 1962, Dr Gurdon discovered that the DNA code in the nucleus of an adult frog cell held all the information to develop into every kind of cell.

This meant that an adult cell could in essence be reprogrammed.

Despite initial scepticism, his theory became accepted when it was confirmed by other scientists.

More than four decades later, in 2006, Dr Yamanaka discovered how mature cells in mice could in fact be turned back to earlier states.

His discovery means stem cells no longer need to be taken from early-stage embryos – a process that has raised ethical issues.

Stem-cell research is still at a very early stage, and only a tiny number of human trials have taken place.

The Swedish media had broadly tipped the pair to take home the honour in recent days.

Dr Gurdon, born in 1933, is currently at the Gurdon Institute in Cambridge, England.

Dr Yamanaka, 50, is a professor at Kyoto University in Japan.

This year's laureates will receive their prize at a formal ceremony in Stockholm on December 10, the anniversary of prize founder Alfred Nobel's death in 1896.

ABC/AFP