Researchers from the Kent Archaeological Field School said the outdoor auditorium built into a hillside in Faversham could seat 12,000 people.
Fifty rows of seats over an area 200 feet in diameter faced an orchestra pit and a narrow stage, they said.
Around 150 similar theatres have been found across northern Europe but the Kent remains are the first to be found in Britain, The Guardian newspaper reported.
Signs of use dating back as far as the Bronze Age suggest the site was probably also used for religious festivals, Paul Wilkinson of the Kent field school said.
"This is important for Roman archaeology because this is the first theatre of its type found in Britain," he said. "Therefore it shows that architectural practices in continental Europe at the time did seep over into Britain."
Wilkinson said he has submitted an application to English Heritage for the theater to become a protected ancient monument site.
"We haven't even begun to touch on the amount of archaeology which is there," he said.
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