CNN reports that the 70-million-year-old fossil, nicknamed Baby Yingliang, was found in
China's Jiangxi province years ago.
It was acquired by Liang Liu, director of stone company Yingliang Group, in 2000, put in storage and forgotten about for nearly a decade.
Staff discovered it while looking through boxes amid the construction of the Yingliang Stone Nature History Museum.
Darla Zelenitsky, an associate professor in the department of geoscience at the University of Calgary in Canada, says she has "yet to see anything like it" in the 25 years she's worked with dinosaur eggs.
"Up until now, little has been known of what was going on inside a dinosaur's egg prior to hatching, as there are so few embryonic skeletons, particularly those that are complete and preserved in a life pose." Darla Zelenitsky, an associate professor in the department of geoscience at the University of Calgary in Canada, via statement.
Researchers concluded that Baby Yingliang and other previously-found specimens were moving inside their eggs in a way that is similar to birds.
"We were surprised to see this embryo beautifully preserved inside a dinosaur egg, lying in a bird-like posture. This posture had not been recognized in non-avian dinosaurs before." Waisum Ma, the lead author of the study and a researcher at the University of Birmingham, UK, via statement.
CNN reports that all birds evolved from two-legged dinosaurs known as theropods.
Tyrannosaurus rex and small velociraptors are well-known examples of theropods.