The researchers, who want to create the next generation 'Cybernose', will initially study the microscopic nematode worm, which has a highly sensitive molecular recognition system, allowing it to sense smell and flavour qualities in grapes.
The team from the Australian National University, Monash University and CSIRO's Food Futures National Research Flagship has been awarded A$4 million to fund its research into how simple animals make sense of smells, and says it is aiming to put the Cybernose to use throughout Australia's wineries by 2013.
"By 2013, we aim to have, in wineries around Australia, a Cybernose that will enable the wine industry to objectively measure aroma and flavour - a more reliable measure than chewing some grapes," said Dr Stephen Trowell, one of the CSIRO researchers.
"This will enable winemakers to pick grapes at the time of optimum ripeness and even to tailor the style of wine precisely and so improve its value.
This has the potential to contribute $750 million annually to the industry."
The Cybernose will draw on how the brains of the nematode worms process information about smells and tell the difference between related odours. Findings about odorant receptors function in these organisms, as well as others such as insects, will directly impact the development of olfactory biosensors in the next generation of electronic nose.
Electronic noses, launched commercially in 1995, are computerised tabletop units with sensors that detect odour molecules.
In recent years they have been increasingly used to detect the quality of food products including wine and coffee, as well as for work on flavour development.
But making the current generation of electronic sensors more discriminating about odours could boost their use across the food and beverage industry even further.
The Cybernose technology could also one day be used to enhance Australia's biosecurity by detecting and intercepting pests and diseases, believe the researchers.