Small coastal dolphins endemic to south-eastern Australia have variously been assigned to described species Tursiops truncatus, T. aduncus or T. maugeanus; however the specific affinities of these animals is controversial and have recently been questioned. Historically the southern Australian Tursiops was identified as unique and was formally named Tursiops maugeanus but was later synonymised with T. truncatus. Morphologically, these coastal dolphins share some characters with both aforementioned recognised Tursiops species, but they also possess unique characters not found in either. Recent mtDNA and microsatellite genetic evidence indicates deep evolutionary divergence between this dolphin and the two currently recognised Tursiops species. However, in accordance with the recommendations of the Workshop on Cetacean Systematics, and the Unified Species Concept the use of molecular evidence alone is inadequate for describing new species. Here we describe the macro-morphological, colouration and cranial characters of these animals, assess the available and new genetic data, and conclude that multiple lines of evidence clearly indicate a new species of dolphin. We demonstrate that the syntype material of T. maugeanus comprises two different species, one of which is the historical southern form of Tursiops most similar to T. truncatus, and the other is representative of the new species and requires formal classification. These dolphins are here described as Tursiops australis sp. nov., with the common name of Burrunan Dolphin following Australian aboriginal narrative. The recognition of T. australis sp. nov. is particularly significant given the endemism of this new species to a small geographic region of southern and south-eastern Australia, where only two small resident populations in close proximity to a major urban and agricultural centre are known, giving them a high conservation value and making them susceptible to numerous anthropogenic threats.