Otago University officials say the exact financial details are ''commercially sensitive'', but it is understood the deal is likely to substantially boost university research funds.
The medical gel is also likely to reduce the number of post-operative complications, including bleeding and adhesions, which often occur after sinus surgery.
Adhesions form when two moist opposing surfaces inside the nose heal together, causing a scar, which can require further surgery to separate.
Leading United States-based medical technology company Medtronic has bought the patent to the medical gel application, which was developed by Otago University in partnership with the University of Adelaide and Robinson Squidgel, a Wellington-based company.
The gel - which is derived from a polymer called chitosan, extracted from crab shell and squid, and another interlinking sugar polymer- has undergone successful trials in sheep and in humans over the past four years.
Otago research and enterprise deputy vice-chancellor Prof Harlene Hayne said the deal with Medtronic was extremely important to Otago University.
This was one of the most significant commercial products Otago University had sold, and the positive outcome was a ''clear reflection of the high calibre of the science conducted at Otago'', she said.
The gel would also ''reduce bleeding and suffering'' for patients undergoing ear, nose and throat surgery.
The deal would also create ''new opportunities'' because a ''large proportion of the proceeds'' will be used to support additional research and to foster future commercialisation activity, she said.
The sale was brokered by a team comprising Emeritus Prof Brian Robinson (70) of the Otago chemistry department, which produced the gel; Prof Peter-John Wormald of Adelaide University, and Wellington-based ear, nose and throat surgeon Simon Robinson, of Robinson Squidgel Ltd, which performed the clinical trials.
Simon Robinson is the son of Prof Robinson.
Otago University's commercialisation arm, Otago Innovation Ltd, also played a key role.
''It's the highlight of my career. It's very satisfying,'' Prof Robinson said.
The gel had had its origins in a discussion with his son at the family crib at Wanaka at Easter, 2007.
Mr Robinson had outlined painful and difficult com-plications sometimes arising from sinus surgery and challenged his father to produce a gel to overcome them.
Adhesions or scarring could block sinus passages, often requiring further surgery to correct.
This affected about one third of all sinus-related operations, Mr Robinson said.
The gel was inserted into the nasal passage, forming a coating over the wound so that adhesions could not form, and it also helped stop bleeding, with its superior blood-clotting properties.
The substance would be ''hugely beneficial to patients'' and he planned to use it in appropriate sinus cases when it was commercially available.
Researchers say the gel could help in about half a million endoscopic sinus operations to relieve sinusitis performed each year in the United States alone.
The equivalent New Zealand figure was several thousand.
• Prof Jim Simpson, Prof Lyall Hanton and Dr Zheng Shi are among other members of the Otago research team.