Remains of about 50 diprotodons, the largest marsupial that ever lived, were found in Queensland and are believed to be between 100,000 and 200,000 years old, researchers said.
"When we did the initial survey I was just completely blown away by the concentrations of these fragments," Scott Hocknull of the Queensland Museum in Brisbane told the BBC.
"It's a paleontologists' goldmine where we can really see what these megafauna were doing, how they actually behaved, what their ecology was."
The "mega-wombats" were still widespread across Australia about 50,000 years ago when the fist indigenous people are believed to have lived but the creatures first appeared about 1.6 million years ago, researchers said.
Scientists say they're not sure why the species went extinct but it could have been due to hunting by humans or, more likely, a changing climate.
The grouping of the skeletons found suggests the creatures had been trapped in a bog while taking refuge from dry conditions, Hocknull said.
Along with the diprotodons, researchers found other prehistoric species including a 20-foot lizard called megalania and giant crocodiles.
"We're almost certain that most of these carcasses of diprotodon have been torn apart by both the crocodiles and the lizards, because we've found shed teeth within their skeletons from both animals," Hocknull said.