An evolutionary misfit fossil called Hallucigenia has finally found its place in the 'Tree of Life', researchers from the University of Cambridge state.

Hallucigenia fossils show that the creature had rows of rigid spines along its back and had seven to eight pairs of legs that ended in claws. These animals were around five to 35 millimetres in length. Their otherworldly appearance resulted in these animals being named as Hallucigenia.

Fossils of the ancient animals were found in the 1970s. Scientists have been unable to add the organism to the 'Tree of Life' as the creature looked to bizarre.

Now, the University of Cambridge have discovered that the fossil is a distant relative of the modern velvet worms, also known as onychophorans. These worms live in tropical forests.

The researchers had long suspected that the Hallucigenia was related to the velvet worm, but a direct link was never established. In the present study, the researchers studied the claws of the fossilized animals as well as their modern relatives and found that they were indeed related.

According to the researchers, Hallucigenia lived approximately 505 million years during the Cambrian Explosion. The era is known for rapid evolution of several animal groups. The worm fossils used in the study came from the Burgess Shale in Canada's Rocky Mountains.

"It's often thought that modern animal groups arose fully formed during the Cambrian Explosion," said Dr Martin Smith of the University's Department of Earth Sciences, the paper's lead author, according to a news release. "But evolution is a gradual process: today's complex anatomies emerged step by step, one feature at a time. By deciphering 'in-between' fossils like Hallucigenia, we can determine how different animal groups built up their modern body plans."

The study is published in the journal Nature.