Previous observations of Psyche had shown no evidence of water-rich minerals on its surface.
However, new observations from the NASA Infrared Telescope Facility in Hawaii show evidence of water or hydroxyl on its surface.
While the source of these molecules on Psyche remains a mystery, scientists propose a few possible mechanisms for its formation.
Water-rich minerals detected on Psyche may have been delivered by carbonaceous asteroids that impacted Psyche in the distant past, said researchers including Joshua Emery, from University of Tennessee in the US.
Psyche is about 300 kilometre across and is made of almost pure nickel-iron metal.
Located in the asteroid belt, it is thought to be the remnant core of a budding planet that was mostly destroyed by impacts billions of years ago.
The study was published in the Astronomical Journal.
PTI