The mummy of the monk was found in Songino Khairkhan district of Ulan Bator, in the lotus position with his legs crossed and his arms folded, covered in cattle skin.
The 200-year-old mummy has been sent to the National Centre of Forensic Expertise in Ulan Bator for further study.
According to an expert on Buddhism, the lotus position in which the body was found indicates the mummy is still in a heightened spiritual meditation called "tukdam".
That is very close to Nirvana, which according to Buddhist beliefs, is the highest possible state achievable when the physical body dissolves.
"This is a sign that the Lama is not dead, but is in a very deep meditation according to the ancient tradition of Buddhist lamas."
The mummified monk was discovered inside a cave by a 45-year-old man who planned to sell it off.