Experts, who spent a year studying the textile, said that it was once a skirt worn by the Tudor queen, making it the only known survivor of her famously lavish wardrobe.
"When I saw it for the first time I knew immediately that it was something special. As I examined it, I felt as though I had found the Holy Grail, the Mona Lisa of fashion, said Eleri Lynn, curator of historic dress at Historic Royal Palaces (HRP), who first discovered the cloth hanging on a wall in the church of St Faith last year.
It is possible that the skirt, which cannot be seen in the painting, is part of the same outfit, Lynn said.
The embroidered design, featuring roses, daffodils and other flowers, was typical of the late 16th century, she said.
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It was made from cloth of silver, which, under Tudor sumptuary law, could only be worn by the monarch or immediate members of the royal family, 'The Telegraph' reported.
St Faith's parishioners included Blanche Parry, Elizabeth's favourite lady-in-waiting, to whom she is known to have given clothes, researchers said.