Two scientists at the Melbourne Museum have recorded the first case of tool use in an invertebrate animal.
The veined octopus, Amphioctopus marginatus, selects, stacks, transports and assembles coconut shells as portable armour.
Many octopuses use available objects such as shells and rocks for shelter, but that is not considered tool use.
Dr Mark Norman says what makes these animals so special is the the planned future use of the coconut shells.
"It comes at a cost, carrying these shells in this awkward way and it's a fantastic example of complex behaviours in what we consider the lower life forms," he said.
"I think these sorts of behaviours are everywhere in nature. There's really complex behaviours that we write off because we think we're the clever ones."
He and colleague Dr Julian Finn spent more than 500 hours diving in remote waters off Indonesia to observe and film the animals.
They watched the octopuses dig out coconut shells from the ocean floor and empty the shells of mud using jets of water.
Dr Finn says it is not unusual for octopuses to live inside coconuts but it is how the veined octopus uses the shells that is unique.
"It gathers them together, it stacks them like bowls, covers its whole body over bowls, lifts them up and then trundles along on its arm tips until a predator comes or there's a threat," he said.
"Then it closes them over like a ball and hides inside."
This series of actions are among the most complex ever recorded for octopuses.
The veined octopus evolved this behaviour by first using clam shells as shelter.
However once humans began discarding large numbers of coconut shells they found the perfect armour to protect themselves against fish attackers.
The pair have written a scientific paper on the veined octopus which appears in the scientific journal Current Biology.
it changes our current beliefes of the origins of upper life as we know it. Origionally only apes where believed ot be able to use tools like we do en masse