The Punds Firth hazel was one of two remaining on the islands but it has now disappeared after being damaged by a sheep.
Growing a hazelnut from one of its clones has been described as an "incredible achievement" on islands which were once covered in woodland and scrub 5,000 years ago but are now considered to be largely treeless.
Archaeologists study Scotland's forests under the sea
Paul Goddard, who leads the woodlands team at Shetland Amenity Trust, said: "We used pollen that had been harvested from the Punds Water tree before it disappeared.
"We didn’t know if it would work and it was a long wait to find out. We couldn’t believe it when we came in one day and spotted the hazelnut appearing from under the leaves.”
Tests have shown that Shetland was once-home to a diverse range of tree species including Rowan, Birch, Willow, Hazel and Alder.
Mr Goddard said trees started to disappear from the landscape around 5,000-years-ago - around the time humans started to inhabit the islands.
He added: "It is also a period when our climate began to change and became cooler and wetter. Both are thought to be contributing factors in the demise of our native woodlands.”
Until recently there were two native hazel trees growing in Shetland, one in a ravine at Catfirth and the other at an island holm at Punds Water, Northmavine. The tree at Catfirth still stands.
The Shetland Amenity Trust germinate over 5,000 trees each year and recently assisted with tree planting at the new Anderson High School.
When digging at the site they found relics of native birch in the peat. The Trust have supported many communities, crofters and land owners in planting trees and can provide support and advice on planting and grants that might be available.
The horticultural unit will be hosting an open day as part of the Shetland Nature Festival where you can come along and find out more.