A team of researchers from the Australian National University has discovered a new species of gecko in central Australia, shedding light on what conditions were like in the area more than 10 million years ago in the process.

The new species, Oedura luritja, was found around mountain ranges near Alice Springs and Kings Canyon.

However, for decades the new species was confused with the more common velvet gecko, with researchers believing only one type of gecko lived in the area.

Lead researcher Dr Paul Oliver said a genetics test proved the new species was not related to its more common counterpart, having its own genetic line stretching back millions of years.

"This new species takes everything in a different direction. It helps to complete the picture," he said.

The discovery of the lizard has helped scientists gain a greater understanding on how deserts were formed in Australia millions of years ago.

Dr Oliver said while the species survived in the ranges of central Australia, its relatives in other locations died out as Australia became drier.

"Australia used to be much wetter in the past, and as the climate got drier and drier, those deserts became poor habitats for those animals," he said.

"However, those ranges have water and trees and functioned as a refuge while everything else died out."

While there are other plant and animal species that live in isolation in central Australia, many have relatives in other parts of Australia.

Dr Oliver said the new gecko species is a rare exception.

"This suggests this gecko may have been isolated by this initial aridification of Australia long ago, and then persisted in its rocky refuge for millions of years," he said.

The team from ANU worked to help identify the new species with Northern Territory government scientists as well as Indigenous rangers in central Australia.

During their work, the team helped to solve a 40-year-old mystery, following on from research of former ANU researcher Robert Bustard.

"He had noticed an unusual population of velvet geckos living in the MacDonnell Ranges south of Alice Springs," Dr Oliver said.

"They were slightly different and had a unique characteristic. He had an inkling there was something there but there wasn't enough information at the time."

The discovery now means that Mr Bustard's suspicions four decades ago can finally be laid to rest, but Dr Oliver said more work needs to be done in the area to gain an even greater understanding.

"We discovered something that's 10 million years old that was overlooked until recently, and we need to continue doing research in that part of the world," he said.

The findings have been published in Royal Society Open Science.