The shrine, enclosed by walls carved with Buddha niches, is part of the Tongzi Temple complex secluded on a mountain near the city of Taiyuan- the capital of Shanxi.
The structure was built in 556 AD during the rule of Northern Qi Dynasty (550-557 AD), a booming period for Buddhism, said researchers with the Institute of Archaeology of Chinese Academy of Social Sciences (IA CASS).
"The structure is the only one of its kind ever found in China and it sheds light on early Buddha carvings," Li Yuqun, researcher with the IA CASS and lead archaeologist on the excavation was quoted by state-run Xinhua news agency as saying.
Though destroyed in a war in 1,117 AD, the temple has yielded a batch of well-preserved statues. One of its walls was carved with a Buddha figure of over 20 meters in height. It was unrecognisable, but the archaeologists unearthed some remnants that suggested its original look. The structure also houses a 2.6-meter mural dating from the Tang Dynasty (618-907 AD), which archaeologists believe is of great value.