Named the Dragon's Breath, the chili was grown by Mike Smith, a farmer from Wales in collaboration with scientists from Nottingham Trent University in the UK.
Researchers believe that the oil from the chili is so potent that it could act as an alternative anaesthetic for those allergic to conventional drugs.
The peppers measure a formidable 2.48 million on the Scoville heat scale, which is a measurement of the pungency (spicy heat) of chili peppers or other spicy foods.
"I have tried it (the chili) on the tip of my tongue and it just burned and burned. I spat it out in about 10 seconds," said Smith.
The Dragon's Breath is so powerful that one drop of its capsaicin oil would be detectable in 2.48 million drops of water.
Smith has applied to Guinness World Records and is currently awaiting confirmation that the chili is the world's hottest.