The rusty, beaten-up car, which had a white paint job over the original Highland green, was spotted by a car buff, according to Fox News. He had planned to convert it into a later model until he saw the vehicle identification plate (VIN).
The numbers stamped on the 1968 Mustang Fastback GT 390 match up with one of two cars bought by Warner Brothers for the 1968 action film, which starred Steve McQueen as a detective Frank Bullitt charging up and down the hilly streets of San Francisco.
The cat-and-mouse chase against a Dodge Charger is regarded by cineastes and petrol heads as the definitive movie car chase.
"I'm 100 per cent sure it's authentic," Ford expert Kevin Marti told Fox News. Marti went to Mexicali, capital of Baja California Sur state, to inspect the car.
The report said the re-discovered Mustang had been used mainly for stunt scenes in the movie and had been out of sight for nearly 50 years.
Some body parts had been beefed up for road action and extra holes drilled for electric cables needed for filming, according to the report.
Meanwhile the other 1968 Mustang used in the Bullitt film is in perfect shape and resides in a private collection.
The Mexican-found Mustang's new owner, named by Fox as Hugo Sanchez, plans to have the car restored to its original condition with some help from Ford.
Should Sanchez decide to sell, experts say the ex-Bullitt car could fetch US$1mil (RM4.4mil) at auction, especially with the 50th anniversary of the film coming up next year.