The singer died June 25 at the age of 50. The cause of his death is still under police investigation.
LifeGem said the hair was obtained by Ralph Cohen, an executive producer on the Pepsi commercial in which Jackson was injured in 1984.
Reportedly among the first to reach Jackson when his hair caught fire, Cohen threw his jacket over the singer's head to help extinguish the flames. LifeGem said Cohen picked up the charred lock of hair and put it in his pocket as Jackson was being taken to the hospital.
"The provenance and authenticity of this lock of hair is impeccable, including the highly publicized video showing the original owner of the hair using his Armani jacket to extinguish Jackson's hair," hair collector John Reznikoff said in a statement. "This jacket was included with the purchase of the hair."
Although a portion of Jackson's hair will remain in Reznikoff's collection, other strands are being used by LifeGem to create a small number of certified, high quality laboratory diamonds.
LifeGem said it also collaborated with Reznikoff in 2007 to successfully create diamonds from composer Beethoven's hair.
"LifeGem specializes in creating diamonds from locks of hair. Our plan is to give people an opportunity to own a diamond made from Michael Jackson's DNA," added Dean VandenBiesen, founder of LifeGem. "We are currently evaluating the hair sample to determine how many diamonds can be created. This will be a limited collection and we anticipate great interest."