The power of the Keck telescopes allows astronomers to see new galaxies (Keck observatory)
The galaxy lies some 12.3 billion light years from the Earth.
The images show a time when the universe itself was in its infancy, evolving and growing fast, with clumps of young stars and clouds of primordial gas coming together to form galaxies.
The sighting breaks a record set in early March by astronomers in Baltimore who spotted a galaxy some 60 million years younger than the latest one.
The discovery of the new galaxy was made by American and British astronomers, including Dr Richard McMahon.
The team used one of two 10-metre twin Keck telescopes on Mount Mauna Kea in Hawaii, the world's most powerful optical observatories.
Dr McMahon admitted: "What we're doing now, we can only do with Keck."
The astronomers found the galaxy by looking for a particular type of high energy radiation emitted by hydrogen atoms as massive stars form.
Using this method they have also found several other galaxies that are nearly as distant.
Dr McMahon believes astronomers are on the verge of a breakthrough which will result in the detection of the very first galaxies, which existed when the universe was about 500 million years old.
Esther Hu, of the University of Hawaii said: "We've already got some candidate objects that are even farther away.
"We are looking about 94% of the distance back to the big bang."
The big-bang theory maintains that the universe started with a huge explosion and has been expanding ever since.
Just when the big bang happened is controversial, but most astronomers believe it was about 13 billion years ago.