The Orchid family, contains the largest number of plant species in the world - up to 30,000, researchers said.
Katia Silvera, a postdoctoral scholar at the University of California, Riverside, stumbled upon the never-before-seen orchid while on a field trip in a mountainous area in central Panama eight years ago.
Unable to identify it, she contacted German Carnevali, a world authority on orchids.
The orchid turned out to be an unnamed species. So Carnevali recently named it after the Silveras: Lophiaris silverarum.
"Lophiaris" is the genus name, comprising about 40 species in the world.
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It is not known if it grows in other areas of Central America. The plant blooms only in November, the flowers lasting about a month.
It is not sold in the US because it is very rare and it reproduces very slowly.
Silvera said that because the Orchid Family is so large, there are many species that have not been found before. As a result, new orchid species are being named every year and the number is rising.
"The diversity of orchids is best seen in the tropics, where, unfortunately, habitat is being destroyed very fast," she said.
The Orchid Family contains the largest number of plant species in the world. They are the most collected group of plants by hobbyists.
Close to 30,000 known species exist worldwide; many remain undiscovered. Panama alone has about 1,100 known orchid species.
Orchids are unique in that the flower's female and male reproductive parts are fused together. An interesting aspect is that orchids can easily hybridise or cross.
The finding was published in journal Phytotaxa.