The fresco, which dates back to the 4th Century AD, was discovered during restoration work at the Catacomb of Saint Thekla but was kept secret for ten days.
During that time experts carefully removed centuries of grime from the fresco with a laser, before the news was officially announced through the Vatican's official newspaper L'Osservatore Romano.
At the same time, tests on bones long venerated as those of St. Paul himself have been dated to the first century, lending credence to the tradition of 1900 years that they are indeed his mortal remains.
According to tradition, St. Paul, also known as the apostle of the Gentiles, was beheaded in Rome in the 1st century during the persecution of early Christians by Roman emperors. Popular belief holds that bone fragments from his head are in another Rome basilica, St. John Lateran, with his other remains inside the sarcophagus.
The pope said that when archaeologists opened the sarcophagus, they discovered alongside the bone fragments some grains of incense, a "precious" piece of purple linen with gold sequins and a blue fabric with linen filaments.
This comes at a propitious time as Roman Catholics around the world are celebrating the year of St. Paul.
St Paul wrote 14 letters to Churches which he founded or visited and tell Christians what they should believe and how they should live but do not say much about Jesus' life and teachings.
He was executed for his beliefs around AD 65 and is thought to have been beheaded, rather than crucified, because he was a Roman citizen.
According to Christian tradition, his body was buried in a vineyard by a Roman woman and a shrine grew up there before Emperor Constantine consecrated a basilica in 324 which is now St Paul Outside the Walls.
St Paul's Outside the Walls is located about two miles outside the ancient walls of Rome and is the largest church in the city after St Peter's.