One of the leading issues in high-T(c) superconductors is the origin of the pseudogap phase in underdoped cuprates. Using polarized elastic neutron diffraction, we identify a novel magnetic order in the YB(2)Cu(3)O(6+) system. The observed magnetic order preserves translational symmetry of the lattice as proposed for orbital moments in the circulating current theory of the pseudogap state. To date, it is the first direct evidence of a hidden order parameter characterizing the pseudogap phase in high-T(c) cuprates.