The historic find fills a huge gap in the known fossil record of kinorhynchs, small invertebrate animals that are related to arthropods, featuring exoskeletons and segmented bodies, but not jointed legs.
The first specimen was unearthed in rocks in Nanjiang, China, in 2013 and more fossils were found later that year and in 2014.
Dubbed Eokinorhynchus rarus - or rare ancient mud dragon, the newly discovered animal dates back from the Cambrian period and contains five pairs of large bilaterally placed spines on its trunk. It is believed to be related to modern kinorhynchs.
"Although arthropod fossils date back to more than 530 million years ago, no kino fossils have ever been reported," Xiao said.
"This is a huge gap in the fossil record, with more than 540 million years of evolutionary history undocumented. Our discovery is the first report of kino fossils," Xiao said.
Scientists believe kinos and arthropods should have evolved more than 540 million years ago.
Researchers found that E rarus has a number of similarities with living kinorhynchs, suggesting a close evolutionary relationship.
Similarities between the fossils of E rarus and living, modern kinorhynchs include their hollow spines arranged in a five-fold symmetry and their body segments each consisting of articulated plates.
However, E rarus differs from modern species with more numerous segments, the researchers said.
The body of kinorhynchs is divided into three sections - a head, which includes a mouth cone with teeth; a neck; and a trunk with 11 segments.
These creatures could provide clues to origins of body segmentation, but such efforts have been hampered by a lack of well-preserved kinorhynch fossils, until now, said Xiao.
The found specimen is 0.078 inches in length and l0.02 inches in width, roughly half the size of a grain of rice, said Xiao.
The study was published in the journal Scientific Reports.
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