The creature was about 20 inches long. It had teeth and probably fed on insects, researchers said.
The dinosaur from the Middle-Late Jurassic period is providing scientists new understandings of how birds evolved, they said.
The dinosaur species called Aurornis xui lived about 150 million years ago, said Pascal Godefroit, lead author and researcher at the Royal Belgian Institute of Natural Sciences in Brussels.
It was found in the Tiaojishan Formation of Liaoning Province, China, CNN reported.
The specimen, exceptionally preserved in a clay sediment, appears to be an adult.
Another fossil from about 150 million years ago, called Archaeopteryx, was previously considered the most primitive known bird.
The newly discovered dinosaur throws that into question, as the new find appears to represent an even more primitive, older bird, Godefroit said.
Experts say the relationships between the earliest bird species and their dinosaur relatives can change in subtle ways depending on the data set being used by particular groups of researchers.
The study was published in the journal Nature.
