The reef is believed to have existed for between five and 10 million years during a period of tropical climate squeezed between two major ice age events, said researcher Jonathan Giddings.
"It provides a significant step forward in showing the extent of climate change in Earth's past and the evolution of ancient reef complexes -- and it also contains fossils which may be of the earliest known primitive animals," he said.
"There is a good chance that the new fossils and organisms found in the reef will provide significant insight into the evolution of early multi-cellular life.
"It could prove that life took more complex forms much earlier in history than we previously thought."
The reef was discovered in the Northern Flinders Ranges in outback South Australia, said Giddings and his colleagues, Associate Professor Malcolm Wallace and Estee Woon from the university's School of Earth Sciences.
It is the only known reef complex of this age anywhere in the world, with the closest being reefs around 800 million years old located in Arctic Canada, they said.
"From a climate change point of view, this reef provides an important record of what was happening in the ocean 650 million years ago," said Wallace, when the eastern part of Australia was still under water.
The scientists will present their findings at a symposium of the Geological Society of Australia at the University of Melbourne on Thursday.