LONDON—A nearly tennis-ball-size gem discovered in Botswana is the second-largest diamond ever unearthed, smaller only than a precious stone carved up to adorn the British crown jewels.

The 1,111-carat gem-quality diamond was found this week at the Karowe Mine in Botswana, said Lucara Diamond Corp., the Vancouver-based company that owns and operates the mine. It was among a cache of huge white diamonds discovered at Karowe this week, including a a 374-carat gem and an 813-carat stone the company said was the sixth-largest...