The HMAS AE-1 was the first Allied submarine lost in World War One, vanishing off Rabaul, Papua New Guinea with 35 Australian and British crew mates on board on 14
The 13th search mission for the vessel found it in waters off the Duke of York islands in Papua New Guinea.
The discovery solves Australia’s oldest naval mystery, the government said.
“This is one of the most significant discoveries in Australia’s naval maritime history,” Defense Minister Marise Payne said on Thursday.
“It was the first loss for the Royal Australian Navy and the first Allied submarine loss in World War One; a significant tragedy felt by our nation and our allies.”
The search team used an underwater drone floating 40m (131ft) above the sea bed to scour the area. The wreck was found in more than 300m of water.
She said the search team had conducted a brief commemorative service for those who had lost their lives on-board.
The government will try to contact the descendants of the crew, and also work with PNG authorities on commemorations for the site.
“I truly believe this will bring peace of mind to the family and descendants of the crew who lost their lives on-board and perhaps, in time, we may discover what caused the submarine to sink,” Ms Payne said.
The exact location has not been revealed in order to protect the submarine, but it appears to have survived in one piece.
There are no plans to return AE1 to Australia, but work will now begin on trying to establish why it sank.
Twelve search missions over the last century had failed to find its resting place.