Until now, the oldest known red algae was 1.2 billion years old, said the paper in the journal PLOS Biology.
Scientists often debate the question of when complex life began on Earth, but they generally agree that large multicellular organisms became common about 600 million years ago.
This discovery could lead experts to rewrite the tree of life, said lead author Stefan Bengtson, professor emeritus of paleozoology at the Swedish Museum of Natural History.
No DNA remains in the fossils to be analyzed.
But the material structurally resembles red algae, embedded in fossil mats of cyanobacteria, called stromatolites, inside a 1.6 billion-year-old Indian phosphorite.
"You cannot be a hundred percent sure about material this ancient, as there is no DNA remaining, but the characters agree quite well with the morphology and structure of red algae," said Bengtson.
Advanced tools -- such as synchrotron-based X-ray tomographic microscopy -- allowed scientists to observe regularly recurring platelets in each cell, which they believe are parts of chloroplasts, the organelles within plant cells where photosynthesis takes place, said the study.
The fossils were discovered in sedimentary rocks at Chitrakoot in central India.
The earliest traces of life on Earth -- in the form of single-celled organisms -- go back some 3.5 billion years.
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