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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A look ahead at the forecast for the Border region.
More than half of the children in foster care in Cumbria are waiting to be adopted with their brothers and sisters.
Amy Johnson was born in Jamaica in 1907, coming to England in 1961. Since then she's lived in the village of Shap.