The first volunteers are expected to be treated by late 2016. If successful, the trial could pave the way to the wide-scale use of artificial blood derived from stem cells.
Blood cells freshly made in the laboratory are likely to have a longer life span than those taken from donors, which typically last no more than 120 days.
They would also be free from infectious agents such as viruses or the rogue prion proteins that cause Creuzfeldt-Jakob Disease (CJD). Professor Marc Turner, medical director at the Scottish National Blood Transfusion Service (SNBTS), who is leading the £5 million project at the University of Edinburgh, said: "Producing a cellular therapy which is of the scale, quality and safety required for human clinical trials is a very significant challenge. But if we can achieve success with this first-in-man clinical study it will be an important step forward to enable populations all over the world to benefit from blood transfusions.
"These developments will also provide information of value to other researchers working on the development of cellular therapies."
The pilot study will involve no more than about three patients, who may be healthy volunteers or individuals suffering from a red blood cell disorder such as thalassaemia. They will receive a small, five millilitre dose of laboratory-made blood to see how it behaves and survives in their bodies.
The blood cells will be created from ordinary donated skin cells called fibroblasts which are genetically reprogrammed into a stem cell-like state.
The resulting induced pluripotent stem (iPS) cells have the same ability as embryonic stem cells to develop into virtually any kind of body tissue.