The parasite has decimated bee populations across the world and an outbreak in NSW has seen more than 5000 hives destroyed in an effort to contain the incursion.

Research and development corporation Hort Innovation has joined forces with the University of Sydney to develop a hormone-based pesticide, which will be a world first if successful.

As part of the $1.2m project, scientists will attempt to create molecules that selectively bind to the hormone receptors of varroa mite - and fellow honey bee pest, the small hive beetle - interfering with reproduction, development, and behaviour.

The target receptors are absent from vertebrates, making the pesticide safe for other beneficial animals in the environment.

UOS Professor Joel Mackay said although there was international recognition of the opportunities to create "safer selective", previous attempts to create insecticides that targeted hormone receptors had failed.

"Several companies have tried and encountered technical difficulties largely because these proteins are challenging to express, purify and characterise," Prof Mackay said.

"However, our team has had over a decade of experience tackling and overcoming these technical challenges.

"We have one of only two laboratories in the world that have determined atomic structures of the hormone proteins of the receptors we are targeting. We have also developed a unique receptor-based chemical library screen for discovery of new pesticide lead molecules."

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Methods to chemically control varroa mite exist, but research shows the parasite is building up tolerances and treatments generally have side-effects to bees.

Hort Innovation chief executive Brett Fifield said pesticides were a crucial aspect of sustainable agriculture and disease control, but there was a pressing need for more environmentally-friendly pesticides that have selective action against "bad" versus "good" insects.

"The development of a commercial pesticide that is fatal to varroa mite and small hive beetle, but not honey bees, will lead to a worldwide market opportunity to export Australian-based technology," Mr Fifield said.

"It will also offer a significant step toward protecting global agricultural systems that are reliant on honey bee pollination."