The site, which is believed to have been a high-status Norse hall from as far back as the 10th century, was discovered at Skaill Farmstead in Westness, Rousay.
Westness is mentioned in the Orkneyinga Saga - a historical narrative of the archipelago - as the home of Sigurd, a powerful 12th century chieftain.
Researchers said the area offers an “unparalleled” opportunity to study eating habits in the region over a millennia.
The discovery is the culmination of years of work by a team from the University of the Highlands and Islands (UHI) to find the building.
Dan Lee, co-director of the excavation project, said: "The exciting news this season is that we have now found the hall at Skaill, as the place name suggests.”
The name Skaill suggests the site was home to a Norse hall or drinking hall of high-status.
"You never know but perhaps Earl Sigurd himself sat on one of the stone benches inside the hall and drank a flagon of ale," Mr Lee added.
The team discovered a building that appears to be more than 13m long, with “substantial” stone walls 5.5m apart and internal features such as stone benches.
Archaeologists have been investigating the later stages of the farm complex and its middens, with a particular focus on past diet, farming and fishing practices.
“We have recovered a millennia of middens which will allow us an unparalleled opportunity to look at changing dietary traditions, farming and fishing practices from the Norse period up until the 19th century," Dr Ingrid Mainland, a co-director for the project, said.
The excavation is part of the Landscapes of Change - Archaeologies of the Rousay Clearances and Westness Estate project, which aims to explore the farmstead at Skaill from the Norse period to its abandonment in the 19th century.
Orkney used to be a seat of great power in the Norse empire and its Viking heritage – found in place names and architecture - remains strong to this day.
Genetic studies have found many from the archipelago are descended from those who settled the islands in the late eighth century.
Agencies contributed to this report