The palace has been dated to approximately 2,100 to 2,300 years ago, a time before the Aztecs, researchers said.
The palace is well preserved and covered about 2,790 square meters. It not only had living quarters for the ruler and his family, but business offices, a staircase, a dining area and a place to perform sacrifices.
The construction techniques used by the builders suggest the building was designed ahead of time and that it was likely a single construction effort that would have taken a lot of organisation, researchers said.
The researchers also note that personal details are still evident in some parts of the palace, such as the cistern for collecting rainwater in the residential quarters and the drain carved into stone to bring in fresh water and remove waste.
The civilisation that existed in Oaxaca is believed to be among the earliest states to come into existence in Mesoamerica.
Researchers Elsa Redmond and Charles Spencer of American Museum of Natural History suggest that their findings at the palace site backs up that theory.
The El Palenque palace exhibits certain architectural and organisational features similar to the royal palaces of much later Mesoamerican states described by Colonial-period sources, researchers said.
The finding were published in the journal Proceedings of the National Academy of Sciences.
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