It proposes that the Universe undergoes cycles of "Big Bangs" and "Big Crunches", meaning our Universe is merely a "child of the previous one".
It challenges the conventional view of the cosmos, which observations show to be 12-14 billion years old.
The new ideas, reported in the journal Science, may explain why the expansion of the Universe is accelerating, the researchers say.
"At present the conventional view is that all of space, time, matter and energy began at a single point, which then expanded and cooled, leaving the Universe as it is today," said Professor Paul Steinhardt of Princeton University, New Jersey.
"However, this new theory suggests that there's a continuous cycle of universes, with each a repeat of the last, but not an exact replica.
"It can be thought of as a child of the previous universe."
The new idea builds on previous work by the same team, and is set to challenge the current model.
Einstein: "The greatest blunder of my career."
Back in the 1920s, when Einstein was developing his general theory of relativity, he introduced a constant, known as the cosmological constant, to explain his idea of a static Universe.
Einstein's equations predicted a Universe collapsing under its own gravitational force, whereas observation showed it clearly was not contracting.
The cosmological constant represented an inherent pressure or force associated with free space, which would be resisting the gravity-drive contraction.
The concept was later abandoned when observations showed the Universe to be expanding - causing Einstein to label the cosmological constant as "the greatest blunder of my career".
In 1998, a form of the constant was re-habilitated when it was found that the Universe's expansion was actually speeding up.
Although the re-introduction of the constant enabled calculations to match theory, it also raised the question that there was something in physics that was "missing".
Things that are happening now will help to create another universe in the future
Prof Neil Turok
Professor Neil Turok, of Cambridge University, told the BBC News website: "When the value of the cosmological constant was calculated, it was found to be much smaller than expected.
"The explanation as to why this constant is so small has become one of the biggest problems in physics.
"At present, the only explanation for this is that things just have to be that way." This theory leaves many questions unanswered, but now Professors Steinhardt and Turok have developed a new theory to explain why the cosmological constant is so small.
They suggest that time actually began before the Big Bang, meaning there was a pre-existing universe.
This would also mean that the current Universe is much older than presently accepted.
"At present there may be an alternative 'dark matter' universe that exists at the same time as ours, but we could never reach it," explained Professor Turok.
"The best way to think of this is to think of a pane of double glazing with a fly on it. The fly is unable to cross over from one side to another, just like we are unable to get from one universe to another.
"These two universes are drawn together by the force of gravity and will eventually collide.
"This means that things that are happening now will help to create another universe in the future."
Edited by Avinash_Tyagi, 05 May 2006 - 06:51 PM.