The fossil - discovered in Ganzhou in southern China - is thought to be between 66 and 73 million years old, and captures a baby dinosaur preparing to hatch from its egg, much like a chicken.
The specimen is thought to be a toothless theropod dinosaur known as an oviraptorosaur, and has been affectionately nicknamed ‘Baby Yingliang’ by researchers.
Oviraptorosaurs - a name which means “egg thief lizards” - were feathered dinosaurs, and lived in what is now Asia and North America between 100 million to 66 million years ago.
Here is everything you need to know about it.
Why is it important?
Researcher Dr Fion Waisum Ma said it is “the best dinosaur embryo ever found in history”.
The fossil shows the baby dinosaur with its head below the body with its feet on either side and its back curled along the blunt end of the egg.
This is known as a “tucking” position, a behaviour seen in modern day birds shortly before they emerge from their eggs.
“This indicates that such behaviour in modern birds first evolved and originated among their dinosaur ancestors,” Dr Ma told the AFP news agency.
The discovery is helping palaeontologists further understand the link between dinosaurs and the birds into which they are thought to have evolved.
“It is interesting to see this dinosaur embryo and a chicken embryo pose in a similar way inside the egg,” added Dr Ma, “which possibly indicates similar prehatching behaviours.”
Professor Steve Brusatte from the University of Edinburgh, told Sky News: “This dinosaur embryo inside its egg is one of the most beautiful fossils I have ever seen.
“This little prenatal dinosaur looks just like a baby bird curled in its egg, which is yet more evidence that many features characteristic of today’s birds first evolved in their dinosaur ancestors.”
He was part of a team, including scientists from the University of Birmingham and China University of Geosciences (Beijing) along with researchers from institutions in China, the UK and Canada, whose findings on the discovery have been published in the iScience journal.
How was it discovered?
The fossilised egg was actually found over 20 years ago, and resided in the Yingliang Stone Nature History Museum in China.
It was first uncovered in 2000, but spent 10 years in storage. It wasn’t until construction work began on the museum and old fossils were being sorted through that researchers took a second look at the egg.
Suspecting a fossilised embryo may have been inside, they investigated further.
The embryo is estimated to be 27cm long from head to tail and lies inside a 17cm-long elongatoolithid egg.
Even now, the full embryo is yet to be uncovered, with part of the young dinosaur’s body still covered by rock - researchers will use advanced scanning techniques to create an image of its full skeleton.
What other fossils have been found?
The news of the fossilised embryo comes days after a similarly exciting fossil find closer to home.
The largest ever fossil of an Arthropleura - a giant millipede - was found by a “fluke” on a Northumberland beach at Howick after a section of cliff fell onto the shore.
It is just the third such fossil ever found and is also the oldest and largest.
The specimen is made up of multiple articulated exoskeleton segments, broadly similar in form to modern millipedes.
The segment is about 75 centimetres long, leading scientists to believe its entire body could have measured around 2.7m long and weighed 50kg.
In order to get so big, Arthropleura must have found a nutrient-rich plant diet and may even have been predators, feasting on other invertebrates or small amphibians.
The fossil is so big it required four people to carry it.
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