The new moon is estimated to be no more than 12 miles across, making it the smallest known moon in the Neptunian system, which already had 13 known moons.
It is designated as S/2004 N 1, which completes one revolution around Neptune every 23 hours.
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"It is so small and dim that it is roughly 100 million times fainter than the faintest star that can be seen with the naked eye" said the space agency.
"It even escaped detection by NASA's Voyager 2 spacecraft, which flew past Neptune in 1989 and surveyed the planet's system of moons and rings," it added.
"The moons and arcs orbit very quickly, so we had to devise a way to follow their motion in order to bring out the details of the system," said Showalter.
"It's the same reason a sports photographer tracks a running athlete -- the athlete stays in focus, but the background blurs," he said.
The method involved tracking the movement of a white dot that appears over and over again in more than 150 archival Neptune photographs taken by Hubble from 2004 to 2009.
On a whim, Showalter looked far beyond the ring segments and noticed the white dot about 65,400 miles from Neptune, located between the orbits of the Neptunian moons Larissa and Proteus, NASA said.
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