The paper details how the dinosaur called Suskityrannus hazelae provided missing clues about how T. rex evolved into the massive predator that ruled the later Cretaceous period.
The scientists determined Suskityrannus was about 9 feet long, stood 2-3 feet at the hip and weighed 45-90 pounds.
By contrast, T. rex is thought to have weighed around 9 tons.
However, despite obvious differences, its diet likely consisted of the same as its larger meat-eating counterpart, with Suskityrannus hazelae likely hunting small animals, although what it hunted is unknown.
Suskityrannus hazelae "is a key link between the enormous bone-crunching dinosaurs like T. rex and the smaller species they evolved from", said Dr Steve Brusatte from the University of Edinburgh.
"The animal would have looked a bit more like the "Jurassic Park " Velociraptors in terms of size and head height than its later huge relatives, like T. rex", said study lead researcher Sterling Nesbitt, an assistant professor in the Department of Geosciences at the Virginia Tech College of Science.
"My discovery of a partial skeleton of Suskityrannus put me onto a scientific journey that has framed my career", says Nesbitt.
Two specimens of the dinosaur were found by Arizona Museum of Natural History crews in the Zuni Basin of western New Mexico between 1996 and 1998.
In describing the new find, Nesbitt said, "Suskityrannus has a much more slender skull and foot than its later and larger cousins, the Tyrannosaurus rex".
Reconstruction of the tyrannosauroid Suskityrannus hazelae from the Late Cretaceous (about 92 million years ago) near the small ceratopsoid Zuniceratops and the hadrosauromorph Jeyawati in the background.
"You can think of this new tyrannosaur as a hugely important piece in the previously incomplete jigsaw puzzle of North American dinosaur evolution", said Alan H. Turner, an Associate Professor of Anatomical Sciences in the Renaissance School of Medicine at Stony Brook University.
While related to the T-rex, the new dinosaur was much smaller and older. "Following Sterling out to see his dinosaur, I was amazed at how complete a skeleton was lying exposed at the site", Kirkland said.
A decent portion of the skeleton was represented in the two specimens, but some parts of its skull, hands, and feet were missing.
The other dinosaur fossil was a partial skull dug out by geologist Robert Denton in 1997 in New Mexico. The researchers believed that they had found fossils belonging to a Velociraptor or something like it.
He said: "Essentially, we didn't know we had a cousin of Tyrannosaurus rex for many years". From 1998 until 2006, the fossils remain stored at the Arizona Museum of Natural History in Mesa, Arizona. "So she's been instrumental to organizing and mentoring young students like I was back then", said Nesbitt.