Prostate cancer is the most common cancer to affect men in Scotland, and scientists believe the test, which spots problem cells that can appear healthy under a microscope, will prevent men from undergoing repeated invasive investigations.
Teams from the universities of Edinburgh and St Andrews led research into the new test, which is being developed with diagnostics firm MDxHealth.
Currently, men who have high levels of prostate-specific antigen (PSA) in their blood are sent for a biopsy of the prostate gland to find out if they have prostate cancer. In some cases the biopsy will be negative or unclear, but a repeat PSA test will leave doctors concerned.
These men face the prospect of having another biopsy, to check cancer was not missed. This means another painful rectal probe, with a risk of being admitted to hospital, even though the chance of having cancer is less than 30%.
The new test probes the DNA of the tissue sample extracted the first time and looks for genetic changes that signify cancer. It works by recognising the "halo" of cells that forms around a prostate tumour.
The Scottish research team reported details of its accuracy in the Journal of Urology.
Dr Grant Stewart, of Edinburgh University, said: "This new test means men do not have to continue to have these unpleasant and unnecessary tests and gives them a bit of certainty."
He said the test, which is not yet available for use on the NHS, could reduce the number of repeat biopsies by 68%.
The most recent figures, from 2010, show that 2679 men were diagnosed with prostate cancer in Scotland in a year.
Chris Garner, 74, from Edinburgh, who has undergone radiotherapy for prostate cancer, said: "The tests we currently have often leave men with uncertainty, as they have a surprisingly high rate of false positive and false negative results.
"Anything we can do that would give more accurate information to men about their condition would go a long way to easing that difficult process."