As the city of Abydos was founded by predynastic rulers and is famed for its temples such as that of Seti I and its graves, researchers believe the city and cemetery were likely home to high-ranking officials and grave builders.
The antiquities ministry made the announcement about the lost civilisation on Wednesday.
"This discovery can shed light on a lot of information on the history of Abydos," a ministry statement said.
The find could be a much-needed boost for Egypt's struggling tourism industry, which dropped from 14.7 million tourists in 2010 to 9.8 million in 2011 following the uprising that toppled the autocrat Hosni Mubarak.