The team at University of California Riverside developed the new technique, which will use NASA's James Webb Space Telescope to detect a strong signal that oxygen molecules produce when they collide.
This signal could help scientists distinguish between living and nonliving planets.
Since exoplanets, which orbit stars other than our sun, are so far away, scientists cannot look for signs of life by visiting these distant worlds.
Instead, they must use a cutting-edge telescope like Webb to see what's inside the atmospheres of exoplanets.
"Before our work, oxygen at similar levels as on Earth was thought to be undetectable with Webb," said Thomas Fauchez of NASA's Goddard Space Flight Center and lead author of the study.
"This oxygen signal is known since the early 1980s from Earth's atmospheric studies but has never been studied for exoplanet research," he added in the journal Nature Astronomy.
When oxygen molecules collide with each other, they block parts of the infrared light spectrum from being seen by a telescope. By examining patterns in that light, scientists can detect the composition of the planet's atmosphere.
UC Riverside astrobiologist Edward Schwieterman originally proposed a similar way of detecting high concentrations of oxygen from nonliving processes and was a member of the team that developed this technique.
"This technique will allow us to find oxygen in planets both living and dead," Schwieterman said.
Schwieterman helped the NASA team calculate how much light would be blocked by these oxygen collisions.
If an exoplanet is too close to its host star or receives too much star light, the atmosphere becomes very warm and saturated with water vapour from evaporating oceans.
Over time, this process may cause entire oceans to be lost while building up a thick oxygen atmosphere more even, than could be made by life.
"So, abundant oxygen in an exoplanet's atmosphere may not necessarily mean abundant life but may instead indicate a history of water loss," the authors wrote.
( With inputs from IANS )