Australian scientists believe they have found the world's first alternative to opioid pain relief – in the form of a tiny fungus.

The microbe was discovered 16 years ago in mud on a boat ramp in Tasmania's Huon Valley.

Now, researchers from the University of Sydney and Queensland University have discovered the fungus contained an unusual molecule which looked very similar to endorphins, used as a natural pain relief mechanism.

"The molecules we've found hit that opioid receptor just as potent as morphine, but we are very hopeful we have good scientific evidence to believe that they will not have the same adverse side effects," said Professor Rob Capon from the University of Queensland.

Australian scientists believe they have found the world's first alternative to opioid pain relief. (9News)

"No one has ever looked at microorganisms, bacteria and fungi before as a source of pain drugs."

One of the dangerous side effects of opioids is that they induce respiratory depression.

Researchers are confident this new drug will provide the same pain relief without the risk.

"Overdose deaths should decrease dramatically with this drug" says Professor Macdonald Christie from the University of Sydney.

Researchers from the University of Sydney and Queensland University have discovered the fungus contained an unusual molecule which looked very similar to endorphins, used as a natural pain relief mechanism. (9News)

"If it's not addictive, then that's even better, because part of the problem is people become addicted to opiates, they use too much, they start to use them illicitly and that's where the problem is."

The drug is currently at the discovery phase and scientists are looking for industry partners to take up licences to their patent.