Fossil hunters working in Ethiopia have unearthed the fragile bones of a baby ape-girl who lived 3.3m years ago, the earliest child ancestor discovered so far.

Named Selam, meaning "peace" in the country's languages, the creature belongs to a species called Australopithecus afarensis, the same as Lucy, the famous adult female discovered in 1974 and believed to be a forebear of the human genus, Homo.

The fossilised remains reveal a critical moment in human evolution that saw our earliest relatives shaking off the legacy of ape ancestors to take their first tentative steps along a path that ultimately led to modern humans.

The remarkably complete skeleton's lower half is almost perfectly adapted to walking upright, while the upper body is more primitive, with gorilla-like shoulderblades and curved chimpanzee-like fingers suited to clinging and climbing trees.

The intact skull and nearly full set of teeth show the large, pointy canines that distinguish apes from early humans have disappeared, leaving only substantial chewing teeth.

The discovery, reported in the journal Nature today, has delighted scientists who say it will help unravel some of the most pressing questions about how our earliest ancestors lived.

Zeresenay Alemseged, at the Max Planck Institute for Evolutionary Anthropology in Leipzig, who led the study, said: "There's no other fossil as complete as this one that is older than the neanderthals. When you look at her, you can tell what she looked like. She has a face and that in my opinion is a huge addition to our understanding of what our human ancestors looked like, not only 3.3m years ago, but when they were three years old."

The discovery has already sparked debate over whether the species walked upright or swung through the trees. Some scientists argue the ape-like shoulders and hands are merely "evolutionary baggage", inherited but unused. Others believe the creature would have lost its curly fingers and gorilla-ish shoulders if it did not spend time in the trees.

"We need to do more work to be sure, so we can't say we know yet, but this seems to be a perfect and capable bipedal species that was also capable of dwelling in the trees," Dr Alemseged said.

The team spent thousands of hours over five years excavating the fossil from a sandstone sediment block removed from a steep hillside in what is now the Dikika region in north-east Ethiopia. The child seems to have died where a freshwater stream from the country's uplands drained into a shallow lake.

"The region would have attracted animals dependent on permanent sources of water, such as early relatives of crocodiles and hippos," said Jonathan Wynn, of the University of South Florida, a co-author of the report. "The first thing that strikes you about the skeleton is how tiny it is. You want to cradle it."

A big question is what the foot bones will reveal when their sandstone casing is removed. Chimp-like grasping toes will tip the argument in favour of a well-developed climbing ability.

When the fossil is completely uncovered and cleaned, the team plans to create a model of Selam, revealing in three dimensions how she would have looked shortly before her death.

First signs of the birth of humanity came 6.5m years ago when the earliest human ancestors split from chimpanzees. It was a further four million years before humans truly emerged with Homo habilis, a species with a brain size 50% that of a modern human and only a rudimentary proficiency with stone tools.

Chris Stringer, an expert in human evolution at the Natural History Museum in London, said: "This is a very special find. It's not until we come to intentional burials by Neanderthals and modern humans in the last 100,000 years that we otherwise find such well-preserved infant remains, because of their fragility."

The ascent of man

6.5m years ago

Earliest human lineages split from chimpanzees and gorillas, but share many traits with the apes.

5.8m years ago

The oldest human ancestor, Orrorin tugenesis, emerges and is thought to walk on two legs.

4m years ago

Australopithecus arrives with a brain no larger than a chimp's. Makes home on the savannah and develops teeth for chewing tough food.

2.5m years ago

Homo habilis, right, the first modern human genus emerges. It has a brain half the size of humans today and begins to use primitive stone tools.

2m years ago

Homo ergaster arrives with a smaller face and teeth, but slightly larger brain. Develops hand axes and may have begun to harness fire.

1.8m years ago

Homo erectus or Java man, the first true hunter-gatherer settles in Asia.

600,000 years ago

Homo heidelbergensis lives in Africa and Europe. Its brain is similar in size to a modern human's.

230,000 years ago

Neanderthals arrive in Britain and Europe.

195,000 years ago

Homo sapiens appears, but it is a further 45,000 years before the first signs of speech emerge.

95,000 years ago

The diminutive "Hobbit" people, Homo floresiensis, is believed to emerge in Indonesia.