In this Letter , we announce the discovery of a new dwarf galaxy , Leo T , in the Local Group .
It was found as a stellar overdensity in the Sloan Digital Sky Survey Data Release 5 ( SDSS DR5 ) .
The color-magnitude diagram of Leo T shows two well-defined features , which we interpret as a red giant branch and a sequence of young , massive stars .
As judged from fits to the color-magnitude diagram , it lies at a distance of \sim 420 kpc and has an intermediate-age stellar population with a metallicity of [ Fe/H ] = -1.6 , together with a young population of blue stars of age \sim 200 Myr .
There is a compact cloud of neutral hydrogen with mass \sim 10 ^ { 5 } M _ { \odot } and radial velocity = +35 kms ^ { -1 } coincident with the object visible in the HIPASS channel maps .
Leo T is the smallest , lowest luminosity galaxy found to date with recent star-formation .
It appears to be a transition object similar to , but much lower luminosity than , the Phoenix dwarf .