The microscopic species is the earliest known prehistoric ancestor of humanity and lived 540 million years ago, according to a study published in the journal Nature.
The creature is named Saccorhytus, after the sack-like features created by its elliptical body and large mouth. Its existence was identified from microfossils found in China.
Researchers believe it was about a millimetre in size, lived between grains of sand on the sea bed and had a large mouth relative to the rest of its body.
It is thought the creature was covered with a thin, relatively flexible skin, had some sort of muscle system which could have made contractile movements. Researchers believe it got around by wriggling.
The study found the creature probably ate by engulfing food particles, or even other creatures, but scientists were unable to find any evidence that the animal had an anus.
Simon Conway Morris, of the University of Cambridge, said: “If that was the case, then any waste material would simply have been taken out back through the mouth, which from our perspective sounds rather unappealing.”
The creature is thought to be the most primitive example of a so-called “deuterostome” – a broad biological category that encompasses a number of sub-groups, including the vertebrates.
If the conclusions of the study are correct, then Saccorhytus was the common ancestor of a huge range of species, and the earliest step yet discovered on the evolutionary path that eventually led to humans, hundreds of millions of years later.
“We think that as an early deuterostome this may represent the primitive beginnings of a very diverse range of species, including ourselves,” added Mr Conway Morris.
“To the naked eye, the fossils we studied look like tiny black grains, but under the microscope the level of detail is jaw-dropping.
“All deuterostomes had a common ancestor, and we think that is what we are looking at here.”
The study was carried out by an international team of academics, including researchers from Cambridge University and Northwest University in Xi’an China.
Degan Shu, from Northwest University, added: “Our team has notched up some important discoveries in the past, including the earliest fish and a variety of other early deuterostomes.
“Saccorhytus now gives us remarkable insights into the very first stages of the evolution of a group that led to the fish, and ultimately, to us.”
The Saccorhytus microfossils were found in China, and pre-date all other known deuterostomes. Most other early deuterostome groups are from about 510 to 520 million years ago, when they had already begun to diversify into vertebrates, sea squirts, echinoderms – animals such as starfish and hemichordates – and a group including things like acorn worms. The creature had small conical structures on its body which may have been the evolutionary precursor of the gills we now see in fish.