Expected to open next month, the laboratory will process urine samples gathered by urologists from Australia and New Zealand to detect the presence and/or severity of bladder cancer, using kits called Cxbladder, developed by Pacific Edge.
Chief executive David Darling told the company's annual meeting last Thursday the potential market could be worth $6 million a year to the company.
The tests will cost $300 per sample, and potentially 50,000 tests could be done a year through an automated process at the lab.
A test will take two hours to complete and results will be made available on a secure web portal.
Pacific Edge used a process called gene expression microarrays to identify critical genes in certain cancers, which they now test for in patient samples to determine their disease status.
Mr Darling said the Cxbladder test was non-invasive and from that information, decisions can be made about treatment.
This was the company's first cancer detection product to be commercialised, and Mr Darling said licences to use Cxbladder would be sold in Europe, using kits supplied by and with facilities audited by Pacific Edge.
Agreement with the first European licensee was close.
Next year, a laboratory will be established in Singapore to service Asia, and the product will be launched in the United States.
Pacific Edge has been working with a partner to develop a test for colorectal cancer, and Mr Darling told shareholders that partner was commercialising a test which over the next nine months would be converted for its own use.
Changes to the test will allow Pacific Edge to diagnose how aggressive tumours were in patients with stage two colorectal cancer, to determine appropriate treatment.
At present there were no validated clinical parameters or biomarkers to identify patients at risk of disease progression, and chief scientific officer Parry Guilford said such information was vital to determine the type of treatment, such as chemotherapy.
Globally, colorectal cancer was the fourth most common cancer with 1.1 million cases diagnosed in 2007.
The test should be commercially launched in 2011.
Work was also continuing on a test for melanoma and gastric cancers.
Chairman Chris Swann said the decision to drop the word biotech from Pacific Edge's name more accurately described its activities.
Earlier, the company reported a $2.5 million loss for the year, slightly worse than the $2.4 million reported a year earlier.
The company has gone back to shareholders to raise $5 million to commercialise Cxbladder, and Mr Swann said with the deadline looming, he was confident of reaching the target.
No dividend would be paid until the company was profitable.
Colin Dawson and Anatole Masfen retired by rotation from the board but were re-elected, while Jonathan Cochrane, who also retired by rotation, did not seek re-election.
