There have been 13 missions to find the submarine
The HMAS AE-1 was the first Allied submarine lost in World War I, vanishing off Rabaul, Papua New Guinea with 35 Australian and British crewmates onboard in 1914.
The thirteenth 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," Defence 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 I; 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 onboard.
The government will try to contact the descendents 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 onboard and perhaps, in time, we may discover what caused the submarine to sink," Ms Payne said.