The flesh-eating marsupial would have lived between 10 and 20 million years ago, scientists say.
The research team has also unearthed evidence of a large carnivorous bird dubbed the “demon duck of doom”.
The dig site in Queensland has yielded remains of at least 20 previously unknown creatures.
The team from the University of New South Wales made the discoveries in the Riversleigh fossil fields in the north-west of the state.
Professor Mike Archer said the dig had turned up “truly extraordinary material”.
He said the killer kangaroos would not have been like the creatures of today.
“There were meat-eating kangaroos with long fangs, and galloping kangaroos with long forearms, which could not hop,” he told The Australian newspaper.
Palaeontologist Sue Hand, who also participated in the dig, told Australian radio that other potentially frightening creatures were unearthed.
“Very big birds… More like ducks, earned the name demon ducks of doom, some at least may have been carnivorous,” she said.
The team now plans to study the fossils in detail, to see what more they can learn about the species and what effect changing climate had on their development.
Source: BBC News, July 12, 2006