Lois Newman has told the story of the Montevideo Maru in Bendigo, Victoria for years and is still lost for words after Saturday morning's announcement that the World War Two-era wreck has been found.

Her uncle Leonard Wall was a prisoner trapped below deck when the ship sank 81 years ago.

"It's so hard to believe we can see her [the Montevideo Maru] sitting on the bottom of the ocean, it's just so amazing," she said.

The sinking of the Montevideo Maru was Australia's worst ever maritime tragedy.

An American submarine fired on the Japanese vessel without realising it carried prisoners.

Among them were approximately 979 Australian troops and civilians captured several months earlier at the fall of the island Rabaul.

The Montevideo Maru has now been found 4000 metres below sea level off the coast of the Philippines, Sydney's Silentworld Foundation has announced.

The maritime archaeology and history foundation partnered with deep-sea survey specialists Fugro and the Defence Department and found it on the 12^th day of their search, according to a media release Silentworld issued on Saturday morning.

Specialists spent days verifying the wreck, Silentworld's director John Mullen said.

"The discovery of the Montevideo Maru closes a terrible chapter in Australian military and maritime history," he said.

"Families waited years for news of their missing loved ones, before learning of the tragic outcome of the sinking. 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."

Lois and her family had long wondered whether anyone would ever find the ship, given the possibility strong tides and volcanic activity could have destroyed it.

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But there it was, on Saturday morning, in pictures astonished descendants could see was a largely intact ship.

The wreckage sits deeper underwater than the Titanic and will not be disturbed, Silentworld said in its media release.

"No artefacts or human remains will be removed. The site will be recorded for research purposes out of respect for all the families of those onboard who were lost," it said.

Chief of the Australian Army Lieutenant General Simon Stuart's thoughts were with the soldiers, sailors and aviators who had fought for Rabaul.

"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.

As Saturday drew to a close, Lois's thoughts were with her uncle.

"I'd like to think that at the end, he was there with his mates," she said.