The discovery was made at Binchester Roman Fort, near Bishop Auckland, in Durham County.
Nineteen-year-old archaeology student from Durham University Alex Kirton found the artifact, which measures about 20cm by 10cm, in buried late Roman rubbish within what was probably a bath house.
The sandstone head, which dates from the 2nd or 3rd century AD, has been likened to the Celtic deity Antenociticus, thought to have been worshipped as a source of inspiration and intercession in military affairs.
"We found the Binchester head close to where a small Roman altar was found two years ago. We think it may have been associated with a small shrine in the bath house and dumped after the building fell out of use, probably in the 4th century AD," Dr David Petts, Lecturer in Archaeology at Durham University, said.
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"It is probably the head of a Roman god - we can't be sure of his name, but it does have similarities to the head of Antenociticus found at Benwell in the 19th century.
Antenociticus is one of a number of gods known only from the northern frontier, a region which seems to have had a number of its own deities, researchers said.
"It's also an excellent insight into the life and beliefs of the civilians living close to the Roman fort. The style is a combination of classical Roman art and more regional Romano-British traditions. It shows the population of the settlement taking classical artistic traditions and making them their own," they said.
"It was an incredible thing to find in a lump of soil in the middle of nowhere - I've never found anything remotely exciting as this," he added.