Aims. We investigate the star-formation ocurring in the region towards IRAS 07527-3446 in the molecular cloud [MAB97]250. 63-3.63, in the far outer Galaxy. We report the discovery of a new young stellar cluster, and describe its properties and those of its parent molecular cloud. Methods. Near-infrared JHK S images were obtained with VLT/ISAAC, and millimetre line CO spectra were obtained with the SEST telescope. VLA archive date were also used. Results. The cloud and cluster are located at a distance of 10.3 kpc and a Galactocentric distance of 15.4 kpc, in the far outer Galaxy. Morphologically, IRAS 07527-3446 appears as a young embedded cluster of a few hundred stars seen towards the position of the IRAS source, extending for about 2-4 pc and exhibiting sub-clustering. The cluster contains low and intermediate-mass young reddened stars, a large fraction having cleared the inner regions of their circumstellar discs responsible for (H − K S ) colour excess. The observations are compatible with a ≤5 Myr cluster with variable spatial extinction of between A V = 5 and A V = 11. Decomposition of CO emission in clumps, reveals a clump clearly associated with the cluster position, of mass 3.3 × 10 3 M . Estimates of the slopes of the K S -band luminosity function and of the star-formation efficiency yield values similar to those seen in nearby star-formation sites. These findings reinforce previous results that the distant outer Galaxy continues to be active in the production of new and rich stellar clusters, with the physical conditions required for the formation of rich clusters continuing to be met in the very distant environment of the outer Galactic disc.