The stretch technology draws on a breakthrough called the dielectric elastomer switch, which allows electronics to be directly embedded into artificial muscle devices to sense movement.
A second university spin-out, IMeasureU, will add its wireless inertial sensor, a compact but sensor-packed device that will feed into the brace's control box.
ABI researchers will use a 3D simulation of the human elbow's kinematics and tissue mechanics to complete the design stage, before working with counterparts in Germany to produce a physical product.
Distinguished Professor Peter Hunter, the director of the ABI and the new MedTech Centre of Research Excellence, said the result would prove a new and valuable technology.
"You could think of it as something you could strap to your arm, and that knows what your arm is trying to do when you move it," he told the Weekend Herald.
"It's not taking over from you, but simply responsive to your movements ... it's just taking some of the load off."
Its initial purpose would be as an assistive device that would take away strain from muscles and joints during tasks such as moving heavy objects about.
"There are plenty of production lines where people suffer from repetitive strain injury because they are overloading joints as part of lifting things," he said.
Down the track, there could be potential for it to be used for rehabilitation or physical therapy.
While some such exoskeletons existed, these were heavy-duty and expensive, he said.
"We are talking about something that's lighter, cheaper and much more personalised - we are really modelling the arm for the individual."
The collaboration stood to advance exoskeleton technology, and could open the gate to devices to assist other areas of the body.
"Although our focus is on one particular joint - the elbow - the reality is whatever is made will transfer to any other joint in the body."
Fraunhofer IPA's collaboration with the university was one of just eight it had in the world, something Distinguished Professor Hunter said acknowledged New Zealand's expertise in the bionics space.
"I think it's some kudos to the university that we've got such a huge organisation wanting to work with us.
"They wouldn't do it if they didn't see real value in it, and it's a complement in particular to Associate Professors Iain Anderson and Thor Besier who have led this work in the ABI," he said.
"It's also a very good illustration of the way New Zealand basic science can lead to practical outcomes, which is what we hope will be replicated many times by the new Government-funded MedTech CoRE," said Distinguished Professor Hunter.
