Researchers are creating naturally bred peanuts – which are not genetically modified – that pose little risk to sufferers.
If experiments are successful, the nuts could be sold widely in supermarkets and may be used by food manufacturers to cut the risks associated with production lines.
Restaurants may also use the nuts to reduce risks for customers who are worried about eating out because of nut allergy.
Professor Soheila Maleki, whose team is working on the project, presented her findings at a European allergy conference in London.
She said the nuts were different to others that had been worked on because they did not involve genetic modification.
An anti-allergy vaccine based on the same principle could also be created, although she stressed further research was needed.
Prof Maleki's team have been breeding peanuts that are missing two major allergens.
Benefits of a low-allergy peanut is that people could consume them in childhood and would be less likely to become allergic to peanuts in the first place. "And people that are allergic would need to have a much higher dose before they suffered a reaction," Prof Maleki said.
She added: "In the case of accidental ingestion, there would be much less of a reaction."
Another use of the peanuts would be in immunotherapy – helping patients who have an established allergy become "desensitised" by giving them a low dose of peanuts over time.
Clinical trials using peanuts to desensitise patients have already produced some success.
Prof Maleki hopes low-allergy peanuts could be successfully produced in the next two to five years. "We hope we would be able to make the nuts available to the public," she said.
She presented her findings on 900 varieties of peanut at the congress of the European Academy of Allergy and Clinical Immunology in London.