The findings are based on a new analysis of data from NASA's Insight Lander, which landed on the planet in 2018.
For four years, the Insight Lander carried a seismometer that recorded vibrations deep inside the Red Planet.
Analysis of these earthquakes and exactly how the planet moves revealed "seismic signals" of liquid water.
There has been evidence of frozen water in Mars' polar circles and vapor in its atmosphere, but this is the first time liquid water has been found on the planet.
The findings were published in the Proceedings of the US-based National Academy of Sciences.
Insight's scientific mission ended in December 2022, four years after its landing.
During that time, the robotic spacecraft recorded more than 1,319 earthquakes.
By measuring how fast seismic waves travel, scientists have identified the material where they are most likely to pass.
"In fact, these are the same techniques we use to search for water or oil and gas on Earth," said Professor Michael Manga of the University of California, California, who participated in the research.
The analysis revealed that there are water reservoirs about 10 to 20 km deep in the Martian crust.
"Understanding the water cycle on Mars is critical to understanding the evolution of its climate, surface and interior," said lead researcher Dr. Vashan Wright of the Scripps Institution of Oceanography at UC San Diego.
Professor Manga said water is "the most important molecule that shapes the evolution of a planet". He said this finding answers the question, "Where did all of Mars' water go?"
Studies of the surface of Mars show that in ancient times the planet had rivers and lakes.
But for three billion years it was a desert.
Some of this water was lost in space when Mars lost its atmosphere. But water on Earth is largely underground, says Professor Manga, and there's no reason why this shouldn't be the case on Mars.
The Insight rover was only able to record the crust beneath where it was found, but researchers say there could be similar reservoirs all over the planet.
If this is true, it is estimated that there is enough liquid water to form a layer more than 800 meters deep on the surface of Mars.
However, they note that the location of groundwater on Mars is not good news for billionaires who have plans to settle on Mars and may want to take advantage of this water.
Professor Manga attributes this to the fact that the liquid water is "10-20 km deep in the Earth's crust".
"Drilling a hole 10 km deep on Mars would be difficult even for (Elon) Musk," he told the BBC.
This discovery could guide ongoing research to find evidence that life once existed on Mars.
"Without liquid water, there is no life," Manga said. "So if there are habitable environments on Mars, they could be deep underground right now."
