We present details of the discovery of XLSSJ022303.0-043622 , a z = 1.2 cluster of galaxies . This cluster was identified from its X-ray properties and selected as a z > 1 candidate from its optical/near-IR characteristics in the XMM Large-Scale Structure Survey ( XMM-LSS ) . It is the most distant system discovered in the survey to date . We present ground-based optical and near IR observations of the system carried out as part of the XMM-LSS survey . The cluster has a bolometric X-ray luminosity of 1.1 \pm 0.7 \times 10 ^ { 44 } erg s ^ { -1 } , fainter than most other known z > 1 X-ray selected clusters . In the optical it has a remarkably compact core , with at least a dozen galaxies inside a 125 kpc radius circle centred on the X-ray position . Most of the galaxies within the core , and those spectroscopically confirmed to be cluster members , have stellar masses similar to those of massive cluster galaxies at low redshift . They have colours comparable to those of galaxies in other z > 1 clusters , consistent with showing little sign of strong ongoing star formation . The bulk of the star formation within the galaxies appears to have ceased at least 1.5 Gyr before the observed epoch . Our results are consistent with massive cluster galaxies forming at z > 1 and passively evolving thereafter . We also show that the system is straightforwardly identified in Spitzer/IRAC 3.6 \micron and 4.5 \micron data obtained by the SWIRE survey emphasising the power and utility of joint XMM and Spitzer searches for the most distant clusters .