Researchers also want to see if they can stimulate higher levels of bioactive material in milk to enhance its health qualities and physical characteristics.
The Victoria state government will give the money (equal to €188,000) to the Cooperative Research Centre for Innovative Dairy Products, Dairy CRC, for the three-year project.
Dairy CRC said it had already developed a database of genes that produce bioactives such as proteins, peptides, lipids and carbohydrates. CRC-backed scientists have also found several components in milk related to cell growth, immunity and inflammation.
Dr Paul Donnelly, chief executive of Dairy CRC, said the new project presented "good prospects for the development of a range of products, particularly functional foods".
Many dairy and ingredients firms in Europe believe the nutraceutical, or functional, foods sector will be one of the biggest growth drivers in dairy markets over the next few years.
Other potential products that may emerge from the project include infant formulas, food additives, animal feed supplements and pharmaceuticals; all of which could offer the dairy industry some handy extra income.
Various bioactives in milk have been associated with stronger bones, improved immune system and gut health in consumers, while CRC believes others may be able to improve brain, nerve and memory functions or even help repair wounds.
The group said its dairy research project had arisen from "the desire to develop high-value products to increase profits for farmers, processors and manufacturers".
The Victorian government's grant is part of an AUS$11m funding package designed to boost growth in the state's dairy industry, which accounts for more than 80 per cent of Australia's dairy exports and 11 per cent of global dairy trade.
The CRC project also follows hot on the heels of another Australian research programme aimed at finding novel proteins in milk.
Dairy Australia will pay biotechnology group Cryptome Pharmaceuticals $850,000 (€530,000) over three years to uncover new proteins and protein fragments in milk that could provide health and nutritional benefits.
Cryptome said milk products were known to be a hotbed of bioactive material and also that milk is generally viewed as a cost-effective source of high-value proteins, which could be used in both functional foods and pharmaceuticals.