The creature called Spinosaurus aegyptiacus had feet well suited to paddling and a sail-like structure rising from its spine.
It also had unusually dense bones, possibly to help weigh it down as it hunted its underwater prey.
“It is the first dinosaur that shows these really incredible adaptations. There is no doubt in my mind that Spinosaurus would have done most of its hunting in the water,” claimed team leader Nizar Ibrahim from University of Chicago in Illinois.
Among other watery adaptations, Spinosaurus has nostrils that are located relatively high on its skull, perhaps so that it could breathe while partly submerged.
“Its teeth are interlocked like a fish trap and its powerful forelimbs could have paddled through the water. Its feet may even have been webbed,” added Simone Maganuco from the Milan museum.
Researchers have long suspected that some dinosaurs would have occasionally gone for a dip.
Many modern dinosaurs, in the form of birds, are aquatic.
But till date, researchers found little evidence of ancient aquatic behaviour other than possible swipe marks where the foot of a swimming dinosaur may have clawed into a riverbed.
At the time that Spinosaurus lived, what is now eastern Morocco, was covered with sprawling lakes, rivers and deltas.
As a top predator, the dinosaur would have had been among the rulers of an ecosystem teeming with huge crocodile-like animals, massive sawfish and coelacanths the size of cars, the study reported.
Compared with other dinosaurs in its group – the two-legged, meat-eating creatures known as theropods – Spinosaurus has strikingly short rear legs, concluded the report published in the journal Science.