The elusive, single-cell creature evolved about a billion years ago and did not fit in any of the known categories of living organisms - it was not an animal, plant, parasite, fungus or alga, they say.
"We have found an unknown branch of the tree of life that lives in this lake. It is unique," saysDr Kamran Shalchian-Tabrizi, researcher from University of Oslo.
So far there was no other group of organisms that descends from closer to the roots of the tree of life than this species, that has been declared a new genus calledCollodictyon.
Scientists believe the discovery may provide insight into what life looked like on Earth hundreds of millions of years ago.
Collodictyonlives in the sludge of a small lake called Ås, 30 kilometres south of Oslo.
It has four flagella - tail-like propellers it uses to move around, and can only be seen with a microscope. It is 30 to 50 micrometers long.
Like plants, fungi, algae and animals, including humans,Collodictyonare members of the eukaryote family that possess cell nuclei enclosed by membranes, unlike bacteria.
Using the characteristics ofCollodictyon, scientists can now infer what prehistoric eukaryotes looked like, says Tabrizi - probably a single-cell organism with finger-like structures that it used to catch microscopic prey.
"They are not sociable creatures," says co-researcher Professor Dag Klaveness, who bred millions of the tiny organisms for the study.
"They flourish best alone. Once they have eaten the food, cannibalism is the order of the day."
They have not been found anywhere but in Lake Ås.
"It is quite fascinating that we can still find these kinds of organisms after so many years," says Tabrizi.
"It has been outside our living rooms for millions of years and we haven't seen it."
Collodictyonwas first found in the lake about 20 years ago by University of Oslo scientists who recognized it was unusual but "didn't know how important it was", he adds.