The revolutionary disc could be on the market within a decade, researchers reported in the journal Nature.
The discs store 1.6 terabytes of data, pipping the capacity of current DVD and Blu-ray discs which hold up to 50 gigabytes.
A standard DVD recorder uses light of a single wavelength to 'burn' data onto the surface of the disc, reports ABC Online.
Researchers from Swinburne University of Technology in Melbourne found that by adding gold nanorods to the disc they were able to increase its capacity.
The nanorods react to light according to their shape - thus allowing researchers to record information using light of different wavelengths, or colours, on the same location on the disc.
The researchers also used polarisation, the angle of the light's electric field, to record data.
"The polarisation can be rotated 360 degrees," says paper co-author Dr James Chon.
"So for example, we were able to record at zero degree polarisation. Then on top of that, we were able to record another layer of information at 90 degrees polarisation, without them interfering with each other," he added.
Professor Min Gu, Director of the Centre for Micro-Photonics at Swinburne, who was also involved in the research, said: "We have created a new recording device that can respond to different colour and different polarisation. By using these properties we can use more of the disc."
In their paper, the researchers were able to record three layers of information, using three different wavelengths and two polarisations.
Since publication, the authors have recorded 10 layers, and they believe it is possible to record 100 layers onto a single disc. (ANI)