The skull was that of an Icthyosaurus communis and embedded in a grey rock. But the body was found to be that of a similar creature called Leptonectes tenuirostris in a light-brown rock.
But when they decided the skeleton needed a modern facelift it was discovered the fossil was a forgery.
Dolphin-like creature
Instead of being one complete creature, the specimen is made up of two different sea creatures. It also includes fake bones made out of plaster.
Experts who examined the fossil found the skull was embedded in a different type of rock to the rest of the skeleton.
The 1.5- (5ft-) long dolphin-like creature, which lived in the Jurassic period 200 million years ago, was given to the museum by a collector called Samuel Allen in 1884.
It had already been mounted in a brown-coloured plaster before being handed over to the institution.
Less than perfect
The forgery was only discovered when museum conservationists decided that this crumbling and cracked plaster needed replacing.
The skull was that of an Icthyosaurus communis and embedded in a grey rock. But the body was found to be that of a similar creature called Leptonectes tenuirostris in a light-brown rock.
Other bones were made out of plaster and stuck into the rock to make them look real while one flipper was also a fake.
"We have thought all along that it was a perfect specimen of an Icthyosaur," said museum conservator Dr Caroline Buttler.
Victorian trick
"But when the plaster started cracking and crumbling and we stripped off five layers of paint we found it was an elaborate forgery. It was an amalgam of two different types of Icthyosaur plus a clever attempt at fake parts."
Staff at the museum are now trying to unearth details about the mysterious benefactor Mr Allen.
"It was quite a shock to find that the creature was not what it had seemed over all these years but was a botch-up," said Dr Buttler. "But you have got to hand it to the Victorians for pulling off such a trick and fooling us all these years."
The skeleton is now being cleaned up and will be put back on display as an example of how the Victorians faked the exhibit.