The Health Ministry's ethics committee has just approved an application by the Spinal Cord Society to open the way for a clinical trial involving 12 patients, which could start next year.
The society's president, Noela Vallis, said there was no shortage of volunteers ready to take part.
"Some have already gone overseas out of a sense of frustration that they can't access it [the experimental treatment] here," Mrs Vallis said.
About 5000 Kiwis are in wheelchairs as a result of accidents - the highest rate of any country in the developed world.
Research director Jim Faed, who heads the the Spinal Cord Society's lab at Otago University, has spent five years developing laboratory methods for growing cells potentially useful for spinal cord injury repair.
His team is focusing on two promising cell types: one is a kind of adult stem cell produced by a patient's own bone marrow.
However, researchers are likely to begin trials using olfactory (scent receptor) cells from the patient's nose, injecting them into damaged spinal cord.
"The olfactory tissue in the nose is unique because it is the only place in the body where there is constant replacement of nerve cells throughout life," Dr Faed said.
"There is growing medical opinion that these cells can help overcome the blocks that prevent nerve cells regenerating after damage to the spinal cord."
The nasal tissue acts like "nurse cells", providing growth factor hormone to nerve cells, enabling them to make "meaningful connections".
Internationally, several research groups have done animal trials using the cells, but there has been only one human trial - in Portugal in 2006. The Otago group is in contact with Portuguese neuropathologist Carlos Lima, who pioneered that trial.
Dr Faed said some participants experienced side-effects, but they were "few and manageable" and none had been fatal.
Positive benefits for patients included return of some muscle function and sensation in parts of the body which previously had no feeling.
Dr Faed said the Dunedin lab hoped to get full approval for the trial before Christmas, and would then begin recruiting patients. The first 12 could start treatment next year.
Mrs Vallis - who founded the society after her late husband was paralysed in an accident - said the group aimed to raise $1 million to fund the trial, in addition to the $300,000 it finds every year to run the lab. "We should be at the forefront of developing this medical treatment, given the number of our citizens in wheelchairs."
Feilding man Iain Scott, a quadriplegic since dislocating his neck while playing rugby 19 years ago, said the possibility of the treatment was "huge" and gave hope to people with spinal cord injuries. "If nothing happens, at least you had a go ... you don't want to die wondering."