Standing 5 feet tall, nearly twice the height of an Emperor penguin, the fossil, discovered in Peru's Reserva Nacional de Paracas and nicknamed Pedro, is 36 million years old, the BBC reported.
The ancient bird, named Inkayacu paracasensis -- the Water King -- had reddish-brown feathers suggesting the distinctive black and white "tuxedo" marking of modern penguins is a relatively recent evolutionary development.
It also had stiff, narrow flippers like modern penguins that make them such accomplished swimmers, researchers said.
"Before this fossil, we had no evidence about the feathers, colors and flipper shapes of ancient penguins," paleontologist Julia Clarke from the University of Texas said.
"We had questions and this was our first chance to start answering them," she said.
The fossil is the latest penguin discovery by Clarke's team in Peru, suggesting penguins thrived there in the late Eocene period, 36 million to 41 million years ago, the BBC said.