The diversity of macroscopic life represented by Ediacara-type organisms remarkably declined at the terminal Ediacaran, previously recognized as the "Kotlinian Crisis". Genus Wengania, a typical multicellular microalga from the Ediacaran Period, was previously thought to occur exclusively prior to the Kotlinian Crisis. In this study, well-preserved microfossils of Wengania are recovered from the early Cambrian Zhujiaqing Formation at the Xiaotan section in the Yunnan Province of South China, including Wengania exquisita and Wengania globosa. Acanthomorphic acritarch Comasphaeridium velvetum, four genera (eight species) of cyanobacteria, sponge spicules and small shelly fossils (SSFs) are also identified in the study, indicating an early Cambrian age for the Xiaotan assemblage. The occurrence of multicellular algae Wengania in the earliest Cambrian suggests that it survived the Kotlinian Crisis and extended across the Ediacaran-Cambrian boundary. To better understand the evolutionary pattern of multicellular microalgae during the transitional interval, we compiled the biodiversity data from Ediacaran to early Cambrian strata in South China, revealing a significant decrease in diversity during the terminal Ediacaran. The Xiaotan assemblage containing diverse primary producers and consumers indicates a recovery of the marine ecosystem following the end of Kotlinian Crisis. It expands the spatial and temporal distribution of typical Ediacaran multicellular algae and provides fossil evidence for the earliest stage of the Cambrian Explosion.