Archaeologist Julio Cuenca, who has been studying the area since the 1990s, believes the site is the only one of its kind in the world.
"It's like a projector of images from a vanished culture," Cuenca told Spanish national news agency Efe, referring to the Guanches, or aboriginal inhabitants of Spain's Canary Islands.
Guanches are thought to have migrated to the island chain some 3,000 years ago, but their culture began to disappear when Spain conquered the islands in the 15th century.
But Cuenca's study of the cave in the aboriginal region of Artevigua adds to the knowledge of their fascinating culture.
Light from the rising sun enters the cave's 5-metre high dome room, from the spring equinox onwards, and is visible inside for about two hours every day from March to September.
It is projected onto the walls in a series of fertility images which change with the seasons.
Male phallic images appear on top of carved triangles, thought to represent the female pubic area. These images gradually shift to reveal a pregnant woman and then a seed.
Cuenca has recorded the summer solstice inside the cave and also observed that moonlight created an image on the wall during the winter solstice.The sunlight also marks the points of solstices and equinoxes.
The local archaeologist has made a career from studying the settlements of the earliest inhabitants of the Canary Islands.
The names they gave to locations on the islands were wiped from maps in the 18th century when the Catholic Church Hispanicized the names of the local topography.
Cuenca described the astronomical knowledge necessary to design the Artevigua temple as "impressive" and more advanced than that seen in any of the other 21 caves which have been found in the area.
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He noted that the discovery would lead to a reassessment of how people thought of the so-called "primitive" former inhabitants.
A webcam is being installed in the temple to allow the public to view the sunlight projections live via the internet.