The huts, at the base of German Hill, are known as Cooper's Terrace (named after English miner Samuel Ward Cooper) and were occupied from the early 1860s until the death of Alice "Granny" Neylon in 1925.
Archaeological artist Jan Morrison, a resident of Arrowtown for 10 years, said a chance conversation in March last year reminded her of an old miner's hut she played in as a child, in the 1960s.
Ms Morrison found the spot on the Macetown-Arrow River Track, about 1km from the Arrowtown village centre, but the area was overgrown with dense vegetation.
She returned with loppers and a pruning saw and uncovered four stone walls, a buried internal floor and a section of a schist stone wall.
Ms Morrison stopped work and informed the authorities, including the New Zealand Historic Places Trust. The trust granted her permission in February to clear the land and present the huts to the public.
"I was terribly excited, stoked. There was talk of other huts and gardens, but no-one paid any attention.
"It's the only collection of European miners' huts which have been found so close to Arrowtown."
Lakes District Museum archivist and researcher Karen Swaine found a photograph taken in 1900 which showed there was more than one hut at the site.
The wall section Ms Morrison found was believed to have been "the German castle", the local nickname of an ornate stone entrance to a garden and timber hut, which belonged to John Augustus Miller.
Mr Miller was a geologist, miner, founder of the Arrow Miners' Association and Wakatipu correspondent for the Otago Witness from 1868 until his death in 1903.
Ms Swaine said the discovery was of major significance, as it was a gateway to a track once teeming with prospecting activity. It was believed every available flat surface was utilised by miners, but survey maps showed only claims.
"It's good to have tangible evidence of what miners did and what made Arrowtown a gold-mining town," Ms Swain said.
"I thought where they built the Arrow irrigation scheme they would have gone right through the huts and they were gone, but we still have them."
Members of the Queenstown and District Historical Society visited the site about two weeks ago. The society and the Arrowtown Village Association had helped fund ongoing investigations into Cooper's Terrace.
Ms Morrison said she would plot the positions of the dwellings, while Ms Swaine continued to search for more photographs and documents.
