The previously undiscovered species, named Kumimanu biceae, after the Maori words ‘kumi’, meaning a large mythological monster, and ‘manu’, for bird, measured at least 1.77 metres (5ft 8).
It lived about 60 million years ago, making it one of the earliest species of the flightless bird.
The discovery – unveiled in the Nature Communications journal – also shed new light on the evolutionary history of penguins, suggesting they evolved to be large shortly after losing the ability to fly and taking to the water.
Rather than being black and white, it would have been brown in colour with a longer beak than its descendants.
Gerald Mayr at the Senckenberg Research Institute and Natural History Museum in Frankfurt said: “It would most likely have been slimmer too and not so cute looking.
“It’s one of the tallest penguins that has ever been found.”
Alan Tennyson, vertebrate curator at the Museum of New Zealand Te Papa Tongarewa, added: “It would have been very impressive: as tall as many people, and a very solid, muscly animal built to withstand frequent deep dives to catch its prey.
“It would not have been the kind of bird that someone could catch alive. It would have been considerably more powerful than a person.”
Other large species have been discovered in the past in Antarctica, Australia and New Zealand, including one which reached heights of 2 metres (6ft 5) – only marginally shorter than footballer Peter Crouch.
The report suggests giant penguins became commonplace shortly after the end of the age of dinosaurs 65 million years ago, at which point large predatory marine mammals such as mosasaurs also became extinct, leaving an evolutionary niche at the top of the food chain which they were able to fill.
However, the reasons why penguins shrank to the rather more modest size they are today – the largest, the Emperor penguin averages just 3ft 7 – remain unclear.
The report’s findings also suggest that Scottish palaeontologist Dougal Dixon may have been on the right track with his 1981 book After Man: A Zoology of the Future, in which he speculated that penguins might one day evolve into giant creatures the size of whales which he called vortexes.