The researchers say that their work has provided them with the first ever opportunity to map the onset of the disease, similar to Alzheimer's, and track how drugs affect it.
They hope that their research will enable them to develop treatments to halt the onset of the disease.
Writing about their study, the researchers revealed that described dementia with Lewy bodies as the second most ost common form of dementia.
Besides causing memory loss, they said, the cureless disease also triggers other distressing symptoms like hallucinations and tremors.
John Mayer, a professor at the University of Nottingham, believes that creating the same damage to the brain in mice may facilitate significant improvements in the current treatments for the disease that target only its symptoms, but do nothing to tackle its causes.
He claims that his team is the first to reproduce the nerve cell death, another symptom that many scientists believe may be one cause of dementia with Lewy bodies.
"This mouse model is the first platform to understand how the brain cell deterioration takes place. We will use this model to identify targets for new drugs to slow or prevent the disease," the Telegraph quoted him as saying.
To create the condition in mice, Mayer and his colleagues engineered them to lack a crucial gene that aids in the "waste disposal" process of all cells.
The researchers observed that the nerve cells began to die in the absence of the gene.
Rebecca Wood, Chief Executive of the Alzheimer's Research Trust, said: "This is a crucial breakthrough for scientists fighting Lewy body disease. Further research using these models will enable us to find new drug targets.
The researcher added: "It is because of the astonishing generosity of Telegraph readers that this research came to fruition. We cannot thank the newspaper and its readers enough for their extraordinary munificence."
The study has been published in the Journal of Neuroscience.