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A measurement of direct photon production in 208 Pb+ 208 Pb collisions at 158 A GeV has been carried out in the CERN WA98 experiment. The invariant yield of direct photons in central collisions is extracted as a function of transverse momentum in the interval 0.5 < pT < 4 GeV/c. A significant direct photon signal, compared to statistical and systematical errors, is seen at pT > 1.5 GeV/c. The results constitute the first observation of direct photons in ultrarelativistic heavy-ion collisions which could be significant for diagnosis of quark gluon plasma formation. 25.75.+r,13.40.-f,24.90.+p 1