The discovery, dubbed 'Baby Yingliang', is believed to be between 66 and 72 million years old, and was found in the Late Cretaceous rocks of Ganzhou in southern China.
The embryo is believed to be that of a toothless theropod dinosaur, or oviraptorosaur - a group of feathered theropod dinosaurs, closely related to modern-day birds.
Fion Waisum Ma, the joint first author and PhD researcher at the University of Birmingham, said:"Dinosaur embryos are some of the rarest fossils and most of them are incomplete with the bones dislocated. "We are very excited about the discovery of"Baby Yingliang" - it is preserved in a great condition and helps us answer a lot of questions about dinosaur growth and reproduction with it.
"It is interesting to see this dinosaur embryo and a chicken embryo pose in a similar way inside the egg, which possibly indicates similar prehatching behaviours."