The treatment of the children remains a scar on Canadian history. In 2015 it was described as a "culture of genocide" by the country's truth and reconciliation commission.
The grave was discovered by a team using ground-penetrating radar at Kamloops, about 220 miles northeast of Vancouver.
How and when the children died is unknown. They were members of the Tk'emlups te Secwepemc nation, an indigenous group in British Columbia.
Documents submitted to the commission laid bare the harsh conditions at the school. In 1935, an official report after a measles outbreak noted that 285 children slept in five dormitories, making it impossible to isolate them and prevent the disease from spreading.
Rosanne Casimir, chief of the Tk'emlups te Secwepemc, said she was working with museums to try to find records of the children's deaths.
"We had a [suspicion] in our community that we were able to verify. To our knowledge, these missing children are undocumented deaths," she said. "Some were as young as 3. We sought out a way to confirm that [suspicion] out of deepest respect and love for those lost children and their families, understanding that Tk'emlups te Secwepemc is the final resting place of these children.
"This is the beginning but, given the nature of this news, we felt it important to share immediately."