Fonterra Savoury Powder, set to be unveiled at this month's HIE expo in Frankfurt, enhances flavour to allow food firms to cut up to a third of sodium out of their products, Fonterra said.
Salt content has become something of a pink elephant for food firms, which have faced heavy pressure from governments in several countries to cut levels in their products due to concerns over public health.
Many in the industry have warned salt is difficult to replace and that taking out significant amounts could seriously alter their products.
Fonterra said its new dairy-based powder, made from natural ingredients, would allow food firms to retain a balanced taste profile and make a "reduced sodium" claim on packaging.
Sensory evaluation panels said the powder gave products a more wholesome and homemade-style taste, it added.
Small quantities of the powder, down to 0.5 per cent in some product formulations, would be enough for a wide range of foods, including dairy, meat, snack foods, soups and sauces. It is particularly good at enhancing cheese, meat and vegetable flavours.
Fonterra has already patented the ingredient across the EU and New Zealand, and has applications pending in the US and other countries.
The powder is the latest in a series of new ingredients intended to help food makers cut salt content.
Salt reduction targets were this year set by the UK Food Standards Agency for different food sectors in the country, following research that revealed average consumers were eating 1.5 times the recommended daily amount of salt.
Small reductions in salt content in a wide range of foods could significantly improve the health of children, according to a recent meta-analysis of clinical trials on salt intake, published in the American Heart Association's journal of Hypertension.
The work adds to a wealth of evidence linking salt to high blood pressure and increased risk of heart disease, one of the developed world's biggest killers.
Food industry representatives say firms are working hard to reduce salt in their foods. "Consumers young and old are benefiting from enormous cuts in salt in awhole range of processed foods, and industry is committed to doing more," said the UK Food and Drink Federation last week.