The plant -- Juraherba bodae -- was found near the southeast corner of Inner Mongolia by professor Han Gang of the palaeontological centre of Bohai University in Liaoning Province.
Less than four centimeters tall, the fossil has root, stem, leaves and fruit well preserved.
The finding was published on the latest English edition of Acta Geologica Sinica, an academic journal owned by the Geological Society of China.
"The occurrence of fructifications implies that the plant is already mature," Han said.
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It could be the earliest record of herbaceous seed plants as well as of herbaceous angiosperms.
"Most Western botanists believe that angiosperms originated from the early Cretaceous period (about 125 million years ago), but the discovery of Juraherba bodae moves that date back 40 million years," Han said.
Botanist Li Bingtao described the finding as a "great discovery," state-run Xinhua news agency reported today.
"Angiosperms are the largest plant group, however, their origins and early evolution remain a mystery," he said.
The article was co-authored by Liu Xueling from Bohai University, Liu Zhongjian from the National Orchid Conservation Center, Frederic M B Jacques from the Xishuangbanna Tropical Botanical Garden, as well as Mao Limi and Wang Xin from the Nanjing Institute of Geology and Palaeontolog.