It is thought the animal roamed the continent 25 million years ago.
The beast has been described as a cross between a wombat and a marsupial lion. Named Mukupirna fortidentata it is thought to have weighed up to 50kg (110lb).
Skull, bone and jaw fragments from the animal were recovered from a site near Alice Springs in central Australia.
It is hoped the finding will shed light on how modern-day marsupials evolved.
Researchers from Flinders University worked more than 2,000 hours to recover the specimens from hard limestone.
Arthur Crichton told the BBC: “They are a bit of an evolutionary intermediate between wombats and their more koala-like relatives.”
The team was able to work out the animal’s weight using measurements of its teeth and limb bones, and its diet from attributes of their skull, jaws and molars.
“[Its teeth] pretty much confirm it’s not a carnivore... it was really quite specialised for processing hard foods like tough fruits, nuts and tubers,” Mr Crichton said.
At 50kg, the Mukupirna would have been one of the largest Australian marsupials living at the time.
