The Pentecopterus decorahensis - named after an ancient Greek ship rowed by 50 oarsmen during the Trojan War - grew to nearly six feet.
With an exoskeleton "helmet" which shielded its head, a sleek narrow body, large limbs for grasping prey and a paddle-like leg used to swim, the sea scorpion was one of the top ocean predators of its time.
Dr James Lamsdell, from Yale University, said: "The new species is incredibly bizarre.
"The shape of the paddle - the leg which it would use to swim - is unique, as is the shape of the head. It's also big - over a metre-and-a-half!
"Perhaps most surprising is the fantastic way it is preserved. The exoskeleton is compressed on the rock but can be peeled off and studied under a microscope.
"This shows an amazing amount of detail, such as the patterns of small hairs on the legs."
Sea scorpions - or eurypterids - were the ancestors of modern spiders.
The creature, reported in the BMC Evolutionary Biology journal, was found among more than 150 fossil fragments excavated from Winneshiek Shale rocks.
It is 10 million years older than any other sea scorpion discovered to date.
Pentecopterus' rearmost limbs were covered in dense bristles, which scientists believe could have helped it to swim or had a sensory function.
Spines found on some of its other limbs are thought to be similar to those found on horseshoe crabs, which use them to aid food processing.
Dr Lamsdell added: "Pentecopterus is large and predatory, and eurypterids must have been important predators in these early Palaeozoic ecosystems."
Sky US Team