Australian researchers have established a link between air pollution and an increased risk of developing dementia, a new study shows.

Air pollution has been linked to an increased risk of developing dementia later in life, Australian researchers have found.

A study published in the Journal of Alzheimer's Disease on Wednesday shows rates of dementia were more likely when people were exposed over a long period of time to two air pollutants.

The two pollutants are 'particulate matter 2.5' and 'nitrous oxide', which are both commonly found in cities around the world.

Study co-author Neuroscience Research Australia's Dr Ruth Peters said it's difficult for people to reduce exposure if they live where pollution levels are high.

"This is concerning because the World Health Organisation (WHO) estimates 91 per cent of the world's population lives in places where air quality exceeds WHO guideline limits," Dr Peters said.

"This research shows that government regulation that reduces our exposure to air pollution has a huge potential health and economic benefit."'

Researchers believe air pollutants can increase inflammation in bodies and raise the risk of having a stroke, which increases the likelihood of developing dementia.

Dementia is the second leading cause of death of Australians with 450,000 people living with the condition.

The study brought together research on people living in Canada, Sweden, Taiwan, United Kingdom and the United States.