They found that this gave rise to dopamine producing brain cells when transplanted.
Director of the university's National Adult Stem Cell Research Centre, Alan Mackay-Sim, said researchers simulated Parkinson's symptoms in rats by creating lesions on one side of the brain similar to the damage caused in human brains.
"The lesions to one side of the brain made the rats run in circles," News.com.au quoted Professor Mackay-Sim, as saying.
"When stem cells from the nose of Parkinson's patients were cultured and injected into the damaged area the rats re-acquired the ability to run in a straight line.
"All animals transplanted with the human cells had a dramatic reduction in the rate of rotation within just three weeks," he added.
The researchers believe that with the new finding they were in the on the verge to finding a cure for Parkinson's, a debilitating disease which includes loss of muscle control caused by the degeneration of cells that produce the essential chemical dopamine in the brain.
The current drug therapies often become less effective after prolonged use.
The study was published in the journal Stem Cells.