The town, near the salt pans of Provadia, in the Varna region of Bulgaria, is located in the same area as Europe's first salt factory.
The archaeology team, led by Professor Vasil Nikolov from the National Archaeology Institute and Museum, have been studying the area for many years and believe the key to the town's success was its natural abundance of salt which, at the time, was as valuable as gold.
Professor Nikolov said: "Now we can say that the Provadia salt pans' location is the oldest town in Europe, it existed between years 4700 to 4200 BC, in the second half of the fifth millennium before Christ."
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The "town", known as Provadia-Solnitsata, was small by modern standards and would have had around 350 inhabitants.
"We are not talking about a town like the Greek city-states, ancient Rome or medieval settlements, but about what archaeologists agree constituted a town in the fifth millennium BC," said Mr Nikolov.
Excerpts above from The Telegraph, Video: Oldest town in Europe discovered and Archaeologists find Europe's most prehistoric town.