Its makers said that the human trials of the implant could begin within three years.
The groundbreaking work led by Prof Chris Toumazou and Prof Sir Stephen Bloom of Imperial College London involves an 'intelligent implantable modulator,' just a few millimetres across that is attached using cuff electrodes to the vagus nerve within the peritoneal cavity found in the abdomen.
The chip and cuffs have been designed to read and process electrical and chemical signatures of appetite within the nerve.
The chip can then act upon these readings and send electrical signals to the brain reducing or stopping the urge to eat.
Prof Toumazou told the BBC that it's a really small microchip and on this chip they have got the intelligence, which can actually model the neural signals responsible for appetite control, as a result of monitoring these signals they can stimulate the brain to counter whatever they monitor.
Bloom claimed that unlike gastric banding, the chip will reduce both consumption and hunger pangs, and is therefore more likely to be effective.