Monolayer FeSe thin film grown on SrTiO_{3}(001) (STO) shows the sign of T_{c}> 77 K, which is higher than the T_{c}-record of 56 K for the bulk FeAs-based superconductors. However, little is known about the magnetic ground state of FeSe, which should be closely related to its unusual superconductivity. Previous studies presume the collinear stripe antiferromagnetic (AFM) state as the ground state of FeSe, same to that in FeAs superconductors. Here we find a novel magnetic order named "pair-checkboard AFM" as the magnetic ground state of tetragonal FeSe. The novel pair-checkboard order results from the interplay between the nearest, the next-nearest and the unnegligible next-next-nearest neighbor magnetic exchange couplings of Fe atoms. The monolayer FeSe in pair-checkbord order shows an unexpected insulating behavior with a Dirac-cone-like band structure related to the specific orbital order of d_{xz} and d_{yz} characters of Fe atoms, which could explain recently observed insulator-superconductor transition. The present results cast new insights on the magnetic ordering in FeSe monolayer and its derived superconductors.
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