Based on the age of the surrounding rocks, this is the earliest known member of the clade that produced today's birds: Ornithuromorpha.
It pushes back the branching-out of this evolutionary group by at least five million years.
The little bird appears to have been a wader, capable of nimble flight.
The discovery is reported in the journal Nature Communications.
Birds began to evolve from the dinosaurs some 150 million years ago at the tail end of the Jurassic period. This is the age of the famous but hotly contested "first bird" Archaeopteryx - now considered by many to be a feathered dinosaur.
Some 20 million years later, when the newfound species was wading and flitting through what would become north-eastern China, palaeontologists believe there was quite a variety of bird life.
About half of those species were Enantiornithes, a group of early birds with teeth and clawed wings that eventually all died out.
The other half, including the new find, were Ornithuromorpha - a group that eventually gave rise to modern birds and looked much more like them.
The branching event behind that forked diversity is what the new discovery pushes back in time; previously the earliest known Ornithuromorph was 125 million years old.
The pair of skeletons that define the new species, christened Archaeornithura meemannae, were dug up from the Sichakou basin in Hebei province.
"The new fossil represents the oldest record of Ornithuropmorpha," said first author Wang Min, from the Chinese Academy of Sciences in Beijing. "It pushes back the origination date... by at least five million years."
The specimens were well preserved, revealing a number of details about A. meemannae. The bird stood about 15cm tall and its legs, even on the upper regions, had no feathers, which suggests a wading lifestyle.
The size and shape of its bones also suggest good manoeuvrability in the air.

The incident at Alliance Parade was reported shortly before 04:00 BST on Saturday.
Police said it is "believed that someone broke into the house and deliberately set it on fire".
They said there was no-one in the house at the time.

It cost the 26-year-old from Newcastle-under-Lyme a quarter-final against the game's biggest draw, Ronnie O'Sullivan.
"I can't be too hard on myself. I hope there'll be many more possibilities in the future," he told BBC Radio Stoke.
"It was good to go deep into a tournament and feel involved. I've not done that too many times."
The only other time Highfield had done so since turning professional in 2010 was at the Paul Hunter Classic in Germany in August.
Media playback is not supported on this device
He also came through three matches there to make the last 16, but his progress at the York Barbican was a much bigger deal, as it came in one of snooker's "Triple Crown" of events.
Two 6-5 wins, followed by a 6-2 third-round success against Peter Lines, earned Highfield a best-ever pay cheque of £15,000.
Although he would have banked £22,500 for beating 1999 and 2003 world champion Williams, Highfield's efforts on his 26th birthday have given him a taste for more.
"The way I played against Lines, I can take a lot of confidence from that," he said.
"I've got used to playing small arenas, but it's about getting used to being out there in front of a massive crowd. Hopefully I can do that as much as I can."
Scientists in China have described a new species of early bird, from two fossils with intact plumage dating to 130 million years ago.
[NEXT_CONCEPT]
A house in north Belfast has been gutted in an arson attack.
[NEXT_CONCEPT]
Liam Highfield made for a frustrated figure at the UK Championship in York after his final-frame defeat by twice former world champion Mark Williams.