Currently there is no available treatment which prevents or halts the spread of the condition and the race is on to produce an antifibrotic drug.
In preliminary trials on rats, FT-11 had a 100% success rate, with no side effects. Human trials on 30 patients are expected to begin soon.
Professor Darren Kelly of Melbourne's St Vincent's Hospital, leader of the two-year research project, says it could save the lives of millions of patients around the world and bring an end to kidney dialysis and also offer an improved lifestyle.
Melbourne University shares patent rights for the drug through Fibrotech Therapeutics.
The drug could mean the difference between taking one tablet a day as against needing eight hours of dialysis every few days; the drug could also be used to prevent diabetes.
Kidney Health Australia, says fibrosis causes the majority of chronic kidney diseases and any drug that could stop the onset of scarring to the kidney would be a major advance. There are currently 10,000 Australians on dialysis.
According to Professor Kelly if clinical trials are successful, the drug could be available within eight to 10 years.
He says his team had just received a grant from the US government to accelerate the development program.
"We are hoping to get into patients within the next 12 months or so," he told ABC Radio Monday.
Researchers initially were considering the drug as a treatment for diuretic kidney disease but it had implications in the treatment of heart failure, liver fibrosis, lung fibrosis and other complications.
"We know at the moment in rat studies that our compound inhibited the development of fibrosis and the interesting thing in the future would be to see whether we can actually reverse fibrosis," Professor Kelly said.
"Currently we have some quite strong data showing that our compounds prevent fibrosis occurring.
"We have looked at it in a series of animal models that are very predictive of clinical outcomes. Hence the reason we are quite confident that our data is robust."
The drug could be used on patients who suffered heart attacks.
"A lot of the remodelling or the fibrosis that occurs in patients with heart attacks causes the heart to fail over the short term," Professor Kelly said.
It could also be used to treat liver cirrhosis, fibrosis and some lung conditions.
"If it is the first of its kind on the market, it would be a huge step forward because there are currently no anti-fibrotics on the market," he said.
"It would be up there with some of the blockbuster drugs like the blood pressure lowering compounds. It would be a huge advance in medical knowledge."