It is hoped the mini-livers could be used to test drugs, reducing the need for animal and human experiments, the Daily Mail newspaper said on Tuesday.
The organ could help repair damaged livers and eventually produce entire organs for life-saving transplants, the paper said.
The miniature liver, which is about the size of a thumbnail, was grown using stem cells in blood taken from the umbilical cords of newborn babies.
Professor Colin McGuckin, part of the from research team from Newcastle University that created the livers, said they could be used to end drug trials using animals or humans.
"When a drug company is developing a new drug it first tests it on human cells and then tests it on animals before beginning trials on humans," he said.
"Moving from testing on animals to humans is a massive leap and there is still a risk.
But by using the mini-livers we have developed there is no need to test on animals or humans."
While other scientists have created liver cells, the Newcastle team are the first to create sizeable sections of tissue from stem cells from the umbilical cord, the Daily Mail said.
They cells are placed in a "bioreactor" developed by Nasa, which mimics the effects of weightlessness, allowing the cells to multiply more quickly.
Chemicals and hormones are then added to encourage the stem cells to turn into liver tissue.
They could potentially be used like dialysis machines, buying time for a patient's liver to repair itself or for doctors to find a replacement liver.
Professor Ian Gilmore, a liver specialist at the Royal Liverpool Hospital in northwest England, told the BBC that the Newcastle team had made a "big ethical leap forward" in not requiring embryos to produce tissue.