"The city is estimated to be about 3,000 years old and was founded under the rule of Amenhotep III, but also to have been active under the pharaohs Tutankhamun and Ay," writes the team of archaeologists who made the discovery in a press release.
The golden city was found outside Luxor, near what is called the Valley of the Kings.
During the excavation, jewelery, hand-painted pots, scarab amulets and bricks with inscriptions showing that they were made during Amenhotep III have been found.
The excavations have been going on for seven months and several blocks have been excavated, including a bakery with ovens, administrative buildings and housing.
"The discovery will give us a rare insight into the life of the ancient Egyptians and a time when the kingdom of the pharaohs was at its economic peak," the statement said.