The researchers started with stem cells taken from fat tissue. It took around a month to grow them into sections of fully-formed living human bone up to a couple of inches long.
The first trial in patients is on course to be conducted later this year, by an Israeli biotechnology company that has been working with academics on the technology, the Daily Telegraph reported.
Professor Avinoam Kadouri, head of the scientific advisory board for Bonus BioGroup, said: "There is a need for artificial bones for injuries and in operations. We use three dimensional structures to fabricate the bone in the right shape and geometry. We can grow these bones outside the body and then transplant it to the patient at the right time."
"By scanning the damaged bone area, the implant should fit perfectly and merge with the surrounding tissue. There are no problems with rejection as the cells come from the patient's own body," he added.
The technology, which has been developed along with researchers at the Technion Institute of Research in Israel, uses three dimensional scans of the damaged bone to build a gel-like scaffold that matches the shape.
Stem cells, known as mesenchymal stem cells, which have the capacity to develop into many other types of cell in the body, are obtained from the patient's fat using liposuction.
These are then grown into living bone on the scaffold inside a "bioreactor", an automated machine that provides the right conditions to encourage the cells to develop into bone.
Already animals have successfully received bone transplants. The scientists were able to insert almost an inch of laboratory-grown human bone into the middle section of a rat's leg bone, where it successfully merged with the remaining animal bone.
The technique could ultimately allow doctors to replace bones that have been smashed in accidents, fill in defects where bone is missing such as cleft palate, or carry out reconstructive plastic surgery.
Professor Kadouri said work was also under way to grow the soft cartilage at the ends of bones, which is needed if entire bones are to be produced in a laboratory.
Bone grafts currently involve taking bits of bone from elsewhere in the patients body and transplanting them to the area which is damaged to encourage healing.
