Electrical engineers from Duke University and the University of Arizona have created the prototype machine, which can capture data in up to a staggering 50 gigapixels, offering images of "unprecedented detail".
The camera's resolution is said to be "five times better than 20/20 human vision over a 120 degree horizontal field".
Current top end consumer cameras are only capable of taking photographs of around 40 megapixels, whereas the prototype device can capture up to 50,000 megapixels of data.
Pixels are individual 'dots' of data - the higher the number of pixels, the better resolution of the resulting image.
In a press release, the researchers expressed their belief that the "next generation of gigapixel cameras" will be available to the public within five years, particularly as electronic components become miniaturized and more efficient.
Details of the camera, developed by a team led by professors David Brady and Michael J Fitzpatrick at Duke's Pratt School of Engineering, were published in the journal Nature.
The project received funding from DARPA - the United States Defense Advanced Research Projects Agency.
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"Each one of the microcameras captures information from a specific area of the field of view," Brady said.
"A computer processor essentially stitches all this information into a single highly-detailed image. In many instances, the camera can capture images of things that photographers cannot see themselves but can then detect when the image is viewed later."
He added: "The development of high-performance and low-cost microcamera optics and components has been the main challenge in our efforts to develop gigapixel cameras.
"While novel multi-scale lens designs are essential, the primary barrier to ubiquitous high-pixel imaging turns out to be lower power and more compact integrated circuits, not the optics."
The prototype camera itself is two and a half feet square and 20 inches deep. Just 3% of the device is made up of optical elements, while the remainder is the electronics and processors required to assemble the gathered information for the images.
The research team said that is where "additional work" is required in order to miniaturize the electronics and increase their processing ability to "make the camera more practical for everyday photographers".
"The camera is so large now because of the electronic control boards and the need to add components to keep it from overheating," Brady said.
"As more efficient and compact electronics are developed, the age of hand-held gigapixel photography should follow."