Development of a growth factor delivery vehicle providing appropriate temporal-spatial release together with an appropriate preclinical large animal model to evaluate bone formation is critical in the development of delivery strategies for bone tissue regeneration. Smectite nanoclays such as LAPONITE™ possess unique thixotropic and protein retention properties offering promise for use in growth factor delivery in bone repair and regeneration. This study has examined bone formation mediated by a clinically approved growth factor delivery system (InductOs®) in combination with Laponite gel in an aged female ovine femoral condyle defect preclinical model (10 weeks). Two different designs, one containing a low volume of Laponite gel (LLG) in combination with the InductOs® absorbable collagen sponge (ACS), the other in which Laponite gel formed the implant (HLG), were compared against InductOs® alone and an autograft positive control. Thus, five groups: (i) empty defect, (ii) autograft, (iii) BMP2 + ACS, (iv) BMP2 + ACS + LLG and (v) BMP2 + HLG + ACS were examined in 9 mm × 12 mm defects performed bilaterally in the medial femoral condyles of 24 aged (>5 years) sheep. Bone formation within the defect was assessed using micro-computed tomography (micro-CT), digital volume correlation (DVC) for biomechanical characterisation as well as histology. The autograft and InductOs® mediated enhanced bone formation (p < 0001) compared to blank controls, while no significant differences were observed between the Laponite/Collagen/BMP delivery vehicles. However, the current study illustrated the excellent biocompatibility of Laponite and its ability to deliver localised active BMP-2, with the opportunity for improved efficacy with further optimisation. Interestingly, DVC-computed strain distributions indicated that the regenerated bone structure is mechanically adapted to bear external loads from the early remodelling stages of the bone reparation cascade. The current studies of selected nanoclay delivery platforms for BMP, assessed in a clinically relevant large animal model auger well for the development of bone fracture therapeutics for an ageing population.