Scientists believe these quirky creatures would have used stone tools, hunted small elephants, vied with giant komodo dragons and may have even used fire.
Because the new fossils show great similarity with those of the Hobbit, the researchers say it's likely they represent its direct ancestor and could even be regarded as an early representative of that species.
They suspect the dwarfed descendant of early Homo erectus, or upright man, somehow got marooned on the island - and that the Hobbit had already obtained its tiny size by at least 700,000 years ago.
Further, they say the discovery has huge implications for our understanding of early human dispersal and evolution in the region - and quashes once and for all any doubters that believe the Hobbit was merely a sick modern human with deformities or congenital disease.
Associate Professor Brent Alloway, of the University of Auckland's School of Geography, has been working at Mata Menge, spending about one month each year there.
He described his role - examining the geological environment where the fossils were found so areas with similar geological characteristics could be targeted in the hunt for more fossils - as "the dream of a lifetime".
"[New Zealand's] archaeological history, although quite colourful, is also quite recent," he told the Herald.
"But when you go back and look at deposits and stone tools that were discarded there over a million years ago, it's just mind-boggling."
The sole Kiwi involved in the project, Associate Professor Alloway said it was a "huge privilege" to continue the legacy of Professor Morwood, whose own career in archaeology began with his studies at the University of Auckland in the early 1970s.
"Sadly, he passed away from cancer in 2013. He was a remarkable man and we got along brilliantly."
He expected further work on the island would yield more fascinating insights.