Discovered in 2015, the planet known as K2-18b is twice the size of Earth with eight times the mass.
Apart from detecting water in the atmosphere, scientists also revealed that K2-18b is located within the habitable zone of the star, which makes it a potential contender to host alien life.
Tsiaras, and colleagues, who are all based at the University College London, London, UK, used the transit spectroscopy technique to determine that while K2-18 b is not Earth-like, it is wet, to some degree.
Tsiaras and his team think the planet is likely a rocky "super-Earth" in possession of an atmosphere that's either very water dominant, heavily mixed with a transparent gas like nitrogen, or features significant cloud formation.
However, the discovery brings astronomers closer to answering the fundamental question of how unique Earth is in the universe, the scientists said.
We may not be flying off to explore K2-18b just yet - but now that we've found water vapor in the atmosphere of a planet orbiting inside a red dwarf's habitable zone, we're one step closer to finding a world that can work for creatures like ourselves.
Professor Giovanna Tinetti (UCL CSED), co-author and Principal Investigator for ARIEL, said: "Our discovery makes K2-18b one of the most interesting targets for future study. That means the surface gravity on this planet would be significantly higher than on our planet", reported NASA in a press release.
Many exoplanets with atmospheres are giant balls of gas, along with the handful of rugged planets for which information is available appear to have no air in any way.
K2-18b orbits a red dwarf star about 110 light years distant - a million billion kilometres - in the Leo constellation of the Milky Way, and is probably bombarded by more destructive radiation than Earth.
Astronomers have detected evidence of water on a potentially habitable planet outside our solar system for the first time. The light filtered through the planets' atmospheres was subtly altered by the composition of the atmosphere. Computer modelling of the data suggested that up to 50% of its atmosphere could be water.
"With so many new super-Earths expected to be found over the next couple of decades, it is likely that this is the first discovery of many potentially habitable planets", said co-author Ingo Waldmann from UCL.
Camera IconA handout artist's impression from ESA/Hubble shows the K2-18b super-Earth, the only super-Earth exoplanet known to host both water and temperatures that could support life.
"This is the coolest exoplanet that we've detected water in".
Their results revealed the molecular signature of water vapor, as well as the presence of hydrogen and helium in the planet's atmosphere. It's orbiting a completely different star, so it doesn't look like earth. Additionally, it could have a hydrogen-rich atmosphere with just water all over.
Water, which covers over 70 per cent of our planet, is considered essential for our kind of life. For reference, temperatures on Earth can span from below -120 °F (-84 °C) in regions like Antarctica to above 120 °F (49 °C) in regions like Africa, Australia, and the Southwestern United States.
They hope that newer technology, such as the James Webb Space Telescope due to launch in March 2021, will be able to unlock more secrets beyond our solar system.
The British scientists used the data gathered by NASA's Hubble Space Telescope. Even detecting the planet in the first place requires highly sensitive instruments capable of detecting the faint dips in starlight; the spectral absorption lines are also incredibly faint.
Laura Kreidberg, an astronomer at the Harvard-Smithsonian Center for Astrophysics, said that K2-18b might be better described as a "mini-Neptune" than a "super Earth".