The gel, Flexiseq, is said to ease pain, restore mobility and protect against further damage from arthritis when rubbed on the affected parts.
Osteoarthritis can cause pain in the hands, spine, knees and hips when bones rub against each other as cartilage breaks down.
Researchers said the gel has no side-effects such as stomach complaints or heart problems that some treatments can cause, 'Daily Express' reported.
The new study was a phase III trial of 1,300 patients suffering moderate pain from osteoarthritis.
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"Most people with osteoarthritis live with chronic pain that interferes with their daily activities," research leader Professor Philip Conaghan, of the University of Leeds, said.
"Many can't take or can't tolerate current oral analgesics because of side-effects. There is therefore a huge un-met need for effective and safe analgesics for osteoarthritis.
"The new study is interesting because it suggests that a novel topical therapy, that doesn't include a topical anti-inflammatory drug, may help osteoarthritis pain and mobility," Conaghan said.
The benefits of the gel are said to build-up over time, meaning patients may eventually need to apply it just once a day to stay pain-free.
The study was published in the journal Rheumatology.