A Sydney palaeontologist has been honoured for her discovery of ancient giant marsupials in outback Queensland.

Karen Black from the University of New South Wales says her team discovered the world's largest tree climbing marsupial among fossils found at the Riversleigh World Heritage Site.

The Australian Academy of Science has recognised Dr Black's work by giving her the 2012 Dorothy Hill Award for female researchers in the earth sciences.

A team of palaeontologists from UNSW and Flinders University have been working at the site in north-western Queensland since 1993.

Dr Black says the sheep-sized creature lived in rainforest trees 15 million years ago.

"We also have skeletons of little joeys that were in the pouch as well," she said.

"This animal in life would have been about 70 kilograms, about 70 centimetres at the shoulder, about 1.2 metres in length and is most closely related to wombats in living animals.

"This animal is actually unusual in terms of all other diprotodonts [a class of marsupials], because it is one of the smallest. Some of these guys were actually two and a half tonnes.

"It would have been the largest animal climbing trees at this time that we know of at this time, definitely.

"(It) probably looked a bit like a long legged wombat."

Researchers have been processing thousands of fossilised skulls and bones from the site.

They have also discovered nearly 30 articulated skeletons, where an animal's bones are found intact.