Researchers from the Museum of London unearthed parts of the yard and gallery walls of the Curtain Theater, which opened in 1577, behind a pub in Shoreditch in east London during redevelopment work on the property, the BBC reported.
"This is a fantastic site which gives us unique insight into early Shakespearean theatres," lead archaeologist Chris Thomas said.
The Curtain was home to Shakespeare's theater company, the Lord Chamberlain's Men, from 1597 until the Globe Theater opened two years later, he said.
Shakespeare plays thought to have premiered there include "Henry V" and "Romeo and Juliet."
"This is one of the most significant Shakespearean discoveries of recent years," said a spokesman for Plough Yard Developments, which owns the site.
The theater disappeared from historical records in 1622.
"Although The Curtain was known to have been in the area, its exact location was a mystery," the spokesman said.