Geologists discovered the ammonite fossil on the Waiau River, which borders the Maungataniwha Forest, when one of them tripped over the specimen.
“We were just wandering up the stream, just having a look-see,” palaeontologist James Crampton told AAP.
“One of us basically tripped over this thing.”
Ammonites are an extinct shellfish that lived at the same time dinosaurs roamed the earth.
They are related to the squid and had tentacles sticking out of their shell.
Ammonites have been discovered several times before elsewhere in the world, but are rare in New Zealand.
The fossil at Waiau River is believed to be 85 million-years-old, based on the age of the rock in which it was found.
The flat spiral shell is almost one-metre long and was embedded in a loose, 50kg-boulder in the stream bed, which the water had eroded.
“It’s a large ammonite by world standards,” Dr Crampton said.
He said the find is an important addition to the bank of knowledge about New Zealand’s biological history.
“This was one of the things that were living at the time (of dinosaurs),” he said.
“It might have even scavenged for bits of flesh off a dead dinosaur.”
New Zealand was once part of the super-continent Gondwanaland before it split about 80 million years ago.
Not long afterwards, a giant asteroid hit earth and ammonites, along with dinosaurs, became extinct.
“It seems like we’ve had a pretty unusual flora and fauna since then, and this is just another little piece of that story,” Dr Crampton said.