They identified the lion from an nearly complete skull, teeth, and upper arm bones.
"It is quite possible that this animal was able to climb trees and pursue its prey through the tree-tops, like a leopard", Dr Gillespie told The New Daily.
It was found at the internationally-renowned Riversleigh World Heritage Area in remote north-western Queensland state, where the remains of a bevy of odd new small to medium-sized creatures have been discovered.
Riversleigh, located about 250 kilometres north-west of Mount Isa in Queensland, is one of Australia's most important fossil sites as it contains remains from ancient mammals, birds and reptiles from the Oligocene (33.9 to 23 million years ago) and Miocene (23 to 5.3 million years ago) epochs.
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Researchers said the new species is about a fifth of the weight of the largest and last surviving marsupial lion, Thylacoleo carnifex, that weighed in at around 130 kilograms (286.6 lbs) and which has been extinct for 30,000 years.
An extinct species of flesh-eating marsupial lion has been identified from 19-million-year-old fossils in the Riversleigh World Heritage Area of north-western Queensland. There are now nine known species, which increased in size over millions of years. Members of this family, the Thylacoleonidae, had highly distinct large, blade-like, flesh-cutting premolars that they used to tear up prey.
Last year, a tiny "kitten-sized" marsupial lion was found at the site and named after veteran British naturalist David Attenborough.
With this new find, the researchers believe that two different species of marsupial lion were present in the late Oligocene at least 25 million years ago.
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The other species called the Wakaleo pitikantensis, was slightly smaller and was identified from teeth and limb bones discovered near Lake Pitikanta in South Australia in 1961.
Interestingly, the team also found structural similarities to another marsupial genus, the P. pitikantensis. Further similarities of the teeth and humerus which are shared with W. schouteni indicate that P. pitikantensis is a species of Wakaleo.
According to the authors, these dental similarities distinguish W. schouteni and W. pitikantensis from later species of this genus, all of which show premolar and molar reduction, and suggest that they are the most primitive members of the genus.
Dr Anna Gillespie, a palaeontologist from the University of New South Wales, says the latest finding raises new questions about the evolutionary relationships of marsupial lions. The animal was named W. schouteni, in honor of palaeo-artist Peter Schouten.
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