The robber, who is on trial for trafficking hundreds of illegally excavated antiquities, revealed the location of the tomb - a wheat field north of Rome - in the hope of gaining leniency from the courts, police said.
Experts believe the underground burial chamber, the Tomb of the Roaring Lions, dates from around 690 BC and belonged to a warrior prince from the nearby Etruscan town of Veio. Decorated with fierce lions and birds, it has been hailed as the earliest example of funerary decorations in the Western world.
Archaeologists, who showed the site to journalists this weekend, said looters had already taken away urns containing the cremated remains of the occupants but had missed some objects.
Among the items recovered are decorated vases imported from Greece, a sword, a two-wheeled bronze chariot and metal spits used for roasting meat for the prince's table. Brooches and a wool spindle suggest that at least one woman, probably the prince's wife, was also buried in the tomb.
The images of birds and fang-bearing lions in colours of black and red, made with paints produced from minerals and fixed on the wall using a compound creating by crushing fossils, are the most important discovery, according to archaeologists. The birds represent the journey to the afterlife while the lions represent the fear of what awaits those who arrive there.
'It's an exceptional find and marks the origin of Western painting,' said Italy's Culture Minister, Francesco Rutelli. 'Sometimes the smugglers arrive before the archaeologists but luckily they could not remove the frescoes.'
Although decorated prehistoric caves predate the Etruscan tomb by millennia, experts say the Veio site is at least a century older than previously discovered Etruscan burial chambers.
The Etruscans were one of the original and most cultured civilisations of central Italy until they were conquered by the Romans. Despite being wiped out, they left behind rich evidence of their sophisticated life. Archaeologists working to restore the frescoes hope the tomb will eventually be opened to the public.