The project research leads are developing a range of new technologies for diagnosing and treating lung diseases.
This is proving useful for medical treatments of internal diseases of the human body.
The new camera works by detecting individual particles, called photons, and is so sensitive it can catch tiny traces of light passing through tissue, such as the light source from the illuminated tip of the endoscope's long flexible tube.
It can also record the time taken for light to pass through the body, meaning the device is able to work out exactly where the endoscope is.
An endoscope is an illuminated optical, typically slender and tubular instrument used to look deep into the body and used in procedures.
Researchers have developed the new camera so it can be used at the patient's bedside.
Prof Kev Dhaliwal, of the University of Edinburgh, said: "It has immense potential for diverse applications, such as the one described in this work.”
"The ability to see a device's location is crucial for many applications in healthcare, as we move forwards with minimally invasive approaches to treating disease."
The project - led by the University of Edinburgh and Heriot-Watt University - is part of the Proteus Interdisciplinary Research Collaboration, which is developing a range of new technologies for diagnosing and treating lung diseases.
From the look of it, this might serve as a decent alternative to X-rays, MRIs and other diagnostic imaging techniques available now.