The Montevideo Maru, discovered off the coast of the Philippines, sank with about 980 Australian troops and civilians on board - almost twice as many Australians killed than during the Vietnam War.
The USS Sturgeon torpedoed the Japanese transport ship on July 1, 1942 during World War II, not knowing it was carrying prisoners of war and captured civilians.
About 1060 prisoners died in the sinking, with those on board ranging from a 15-year-old boy to men in their sixties.
The prisoners had been captured in the fall of Rabaul months earlier.
A team set out on an expedition to find the wreck in the South China Sea, northwest of Luzon, on April 6 and discovered it after 12 days, with help from state-of-the-art technology including an autonomous underwater vehicle.
The group of maritime archaeologists, conservators, operations and research specialists, and ex-naval officers took a number of days to verify the wreck was indeed the Montevideo Maru.
The mission was put together by Sydney's Silentworld Foundation, a not-for-profit organisation dedicated to maritime archaeology and history, along with Dutch deep-sea survey specialists Fugro.
The Department of Defence also supported the project to find the wreck, which Silentworld director John Mullen said closed a "terrible chapter in Australian military and maritime history".
"Families waited years for news of their missing loved ones, before learning of the tragic outcome of the sinking," Mr Mullen, a maritime history philanthropist and explorer, said.
"Some never fully came to accept that their loved ones were among the victims.
"Today, by finding the vessel, we hope to bring closure to the many families devastated by this terrible disaster."
Andrea Williams, an Australian whose grandfather and great uncle died in the Montevideo Maru disaster, was among those on board when the wreck was discovered.
She is a founding member of the Rabaul and Montevideo Maru Society formed in 2009, which represents descendants' interests.
Ms Williams described the discovery as marking an "extraordinarily momentous day" for Australians connected with the disaster.
"Having had a grandfather and great-uncle as civilian internees on Montevideo Maru always meant the story was important to me, as it is to so many generations of families whose men perished," she said.
"I could never understand why it was not a more powerful part of our Australian WWII history."
The wreck will be left undisturbed, with no human remains or artefacts removed from it and the site recorded for research purposes out of respect for families.
The Montevideo Maru lies at a depth deeper than the Titanic.
Australian Army chief Lieutenant General Simon Stuart said soldiers who fought to defend Rabaul met a terrible fate on the ship.
"Today we remember their service, and the loss of all those aboard, including the 20 Japanese guards and crew, the Norwegian sailors and the hundreds of civilians from many nations," he said.
The expedition to find the Montevideo Maru was years in the making, with Silentworld planning the discovery mission for five years and Montevideo Maru Society putting in two decades of dedication to assemble the expedition team.
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