"I think that the government's research and development budget would be allocated for this sector next year," Lee told a group of senior government officials and executives at private firms researching stem cells.
Lee said that the government will "swiftly handle" the funding issue and called for stem cell researchers to work in an "adventurous" way.
Stem cells are cellular building blocks that researchers hope one day could help provide cures for diabetes, Alzheimer's disease and Parkinson's disease.
"Although there is an industrial aspect for stem cell research, it has more important significance because it could provide cures for hard-to-cure diseases," Lee said.
In 2009, South Korea conditionally lifted a ban on stem cell research using human eggs, three years after outlawing the research because disgraced cloning pioneer Hwang Woo-suk was found to have faked his work.
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