Prior explained that it was not the first-time dogs had been used to detect AFB but previous methods had led to inconclusive results in the field.
"When bees have AFB they often have other diseases," he said.
"Previously dogs were trained on infected colonies without isolating the target scent. This project aims to overcome this issue, and produce more reliable detection dogs."
"The new training will focus on detecting actual AFB spores and other relevant AFB bacteria that have come directly from a laboratory."
Overseas, AFB had been managed through use of antibiotics, but the disease had developed resistance over time.
New Zealand had always treated the disease through destruction of hives and hive equipment, which had a significant cost to industry.
New Zealand's apiculture industry currently pays over $2 million in annual levies for beehive inspections.
"There's almost a million beehives registered in New Zealand but we're only physically inspecting around 4,000 hives a year," Prior said.
"Unless we get some new tools like dogs to rapidly find the disease it gets more and more expensive to find that last five percent of the disease out there."
The industry's ultimate goal is to eradicate AFB, which would be a world first.
Dogs can inspect an apiary of 20 hives within two minutes, whereas an inspector could take at least 90 minutes.
Dogs can also be used to inspect stored equipment, allowing other sources of infection to be identified and destroyed.
The Ministry for Primary Industries is contributing $50,000 through Sustainable Food & Fibre Futures towards the one-year, $95,000 project.
MPI director of investment programmes, Steve Penno said the project could be a game changer for New Zealand's apiculture industry.
"Being able to detect the disease early would reduce lost production and the need to destroy hives"
"If successful, we'd be the first country in the world to use dogs to detect AFB. The detector dogs could be commercially available to farmers as a service."
The project is also supported by the Southern North Island Beekeeping Group and the Honey Industry Trust, which have contributed funding and will help with fieldwork.