The life-saving treatment will be used next year by doctors on about ten children born with severe oesophageal atresia.
The medical team at Great Ormond Street also plans to develop the £100,000 treatment for adults suffering from oesophageal cancer - a far more common and often fatal condition.
Dr Peter Steer, the hospital's chief executive, said: "This new oesophageal transplant procedure has the potential to transform the lives of children with extremely complex health conditions. Our researchers are now working closely with hospitals across London to develop, and make available, this pioneering procedure."
Oesophageal atresia can be diagnosed when babies are still in the womb, at around 20 weeks.
Stem cells can be extracted immediately after birth and used to 're-engineer' a pig gullet stripped of its animal cells. The stem cells, taken from the baby's muscle and their incomplete gullet, will make the animal tissue suitable for transplant. The human cells, forming around the animal scaffold, mean a child's body will not reject the foreign organ.
The first children for next year's trial could be identified in the coming months, with gullets of varying sizes taken from pigs at a British farm in readiness.
The tissue engineering takes about eight weeks and doctors hope to perform transplants when children are two to three months old. Professor Paolo De Coppi, a consultant paediatric surgeon at Great Ormond Street, said: "This is completely new. Pigs have been used for heart valve replacement for many years, but nobody has received an organ developed from an "animal scaffold" this way."
The surgeon previously pioneered a transplant in 2010 in which a 13-year-old boy was given a new trachea created from a deceased human donor using the teenager's stem cells.
Although 90 per cent of oesophageal atresia cases are treatable using a relatively simple operation to close the gap, the most severe cases are dealt with by moving the stomach up into the chest cavity.
Doctors justify the £100,000 cost of the pig organ transplant because the complications caused by this current treatment will be avoided.
The research was funded by the Cell and Gene Therapy Catapult and the UK Stem Cell Foundation. Before the first patient can receive a transplant, it must be approved by the Medicines and Healthcare Products Regulatory Agency.
Professor De Coppi said: "We are confident we will be treating our first patients in 2018."
