Scottish Water was carrying out the works at Philiphaugh on the outskirts of Selkirk whilst laying new pipes between Howden and Yarrowford.
A Scottish Borders Council's archaeologist said:
"It is an exciting discovery. It is not every day that medieval villages are found - most of them are known, this one was completely unknown."
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Snow and heavy rain may hamper Monday morning rush hour
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The family of a Cumbrian who suffered a botched blood transfusion are furious there was no reference to compensation in the Spending Review.