The hope is that this stem cell will grow into a fully-functioning human organ -- a kidney or a liver, for example -- as the animal matures.
This would mean when the creature is fully grown, the organ could be harvested from the animal and used for transplanting into a person in need.
"Experts will study what possibilities this kind of research will generate," especially with regard to ethics and human dignity, a government official told AFP.
The panel's recommendation will be sent to a government committee next month, which is expected to begin drafting guidelines shaping the boundaries of Japan's cutting-edge embryonic research.
Japan currently allows scientists to grow chimeric embryos for two weeks in test-tubes, but prohibits them from putting those embryos into an animal's womb, the official said.
In the proposed experiment, researchers, led by Hiromitsu Nakauchi of Tokyo University, want to implant a chimeric embryo made from a fertilised pig egg and a human induced Pluripotent Stem (iPS) cell into a pig's womb, he said.
Stem cells are infant cells that can develop into any part of the body.Until the discovery of iPS cells several years ago, the only way to obtain stem cells was to harvest them from human embryos.
This is controversial because it necessitates the destruction of the embryo, a process to which religious conservatives, among others, object.
Pioneering work done in 2006 by Shinya Yamanaka at Kyoto University, a Nobel Laureate in medicine last year, succeeded in generating stem cells from skin tissue.
Like embryonic stem cells, iPS cells are also capable of developing into any cell in the body, but crucially their source material is readily available.