"The new resource is forecast to contain highly significant quantities of tight (light crude) oil and deep gas, dwarfing Bahrain's current reserves," said the country's Higher Committee for Natural Resources, which is chaired by Crown Prince Salman bin Hamad.
The find in the Khaleej al-Bahrain, off the west coast, was "the largest discovery of oil in the country's history", it said in a statement.
Prince Salman tweeted that a press conference on Wednesday would "provide additional details on the discovery, including initial findings of size and extraction viability".
Manama is the smallest producer of hydrocarbons in the Gulf Cooperation Council (GCC), which also groups Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Bahrain currently has only one oilfield with several hundred million barrels of crude reserves.
The field was the first to be discovered in the Gulf and the first to start production.
It currently pumps around 50,000 barrels per day (bpd), in addition to over one billion cubic feet (28 million cubic metres) of natural gas daily.
The kingdom, which raises around 80 percent of its revenues from oil, receives another 150,000 bpd from the Abu Safa oilfield which it shares with Saudi Arabia.
