However, some children were unsure about which way to hold a book when they first started school, therefore diagnostic tests at such a young age were ineffective.
"Early reading behaviour needs to be developed at 5 [years]. At our school, when a child starts school we would be developing an absolute love of reading literature. We would not be labelling a child at 5 as dyslexic at all."
Developed by Karyn Carson, the research uses results from a simple computer test to predict a child's reading ability.
The test, which assesses how well a child can identify sounds and words, takes about 10 minutes to administer.
Dr Carson's supervisor, UC's College of Education pro-vice-chancellor Gail Gillon, said the test could predict with 92 per cent accuracy a child's reading ability one year after it was taken.
During the test, children were talked through activities by a female voice and asked to match pictures with corresponding sounds.
Because it assessed a child's phonological awareness, (awareness of speech sounds comprising language) the test could also be an early indicator for dyslexia, estimated to affect 7 per cent of New Zealand children.
"One of the strong features associated with dyslexia is a phonological awareness difficulty," Professor Gillon said.
"As an early screen it would be one red flag [for dyslexia] ... but it would need to be looked at in conjunction with other things."
The test had been taken by children as young as 3 years and also those with disabilities. "It is designed to pick up children of all levels who are struggling."
Researchers hoped to release the programme free to schools once it was finalised.
