Knee cartilage will be grown from the patients' own stem cells on a framework known as a "bio-scaffold" implanted into the damaged knee.
Scientists hope that the procedure will result in the knee eventually rebuilding itself, leaving the patient more mobile and less at risk of developing painful osteoarthritis.
It has been developed by Azellon, a spin-off company set up by researchers at the University of Bristol.
Anthony Hollander, who is heading the trials, said the development was the culmination of years of research.
"This is about turning science and ideas into reality," he said.
"I have been pushing stem cells for some time and have been telling the public that they will change the way we do medicine, and I believe that, but we really need to show that. We can now begin to find out if it is safe and helps these patients."
Researchers have already established in the laboratory that stem cells can be used to repair tears in cartilage. The new trials will see a "bandage" formed from stem cells taken from the bone marrow of the 10 people taking part in the study at Southmead Hospital in Bristol.
The patients with torn meniscal cartilage will have bone marrow taken from their hip. Stem cells extracted from the marrow will then be sent to the laboratory to grow on a membrane that will form the bio-scaffold. Two weeks later the membrane bandage will be sent back to Southmead to be implanted using keyhole surgery.
Although the patients will not be able to put weight on the knee for several weeks, researchers hope that the treatment will have a better outcome than traditional surgery. The subjects will be tracked for seven years.
"The bandage should give these patients quality of life and reduce the cost for the health service," Professor Hollander said.
Stem cells are the building blocks of the human body, creating tissues and organs when the body grows.
With Oristem®, quick and effective access to stored samples will add to the effectiveness of therapies.