Colombia has announced it has found the shipwreck of a storied Spanish galleon laden with gold, silver and precious stones, three centuries after it was sunk by the British in the Caribbean.

President Juan Manuel Santos declared that "this is the most valuable treasure that has been found in the history of humanity", speaking from the northern port city of Cartagena, close to where experts made the hugely valuable find.

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Treasure hunters had searched for the ship for decades, described by some as the holy grail of shipwrecks.

The loot is estimated to be worth around $3 billion, its value having dropped significantly due to the falling price of silver, according to US-based company Sea Search Armada (SSA).

Experts confirmed that they had located the San Jose, which was lying on its side, when identifying it by its unique bronze cannons with engraved dolphins.

"The amount and type of the material leave no doubt of the identity" of the shipwreck, said Ernesto Montenegro, head of the Colombian Institute of Anthropology and History.

The discovery "is an unprecedented event for the country," Cartagena mayor Dionisio Velez said.

On Twitter the issue was trending under #GaleonSanJose, as users debated whether to return the loot to Spain and estimates about its current value.

Legal battle stalled search confirmation

The San Jose was sunk in June 1708 off Colombia's Caribbean coast. ( National Maritime Museum/Samuel Scott )

SSA, whose subsidiary claimed in the early 1980s that it had found the galleon's final resting place, was engaged in a long-running battle with the government of Colombia.

The find was not confirmed, and a US court ultimately ruled it was Colombian property.

What is the value of San Jose's cargo? The managing director of Sea Search Armada, Jack Harbeston, wrote an account titled The Sinking of the San Jose in 2011 where he tried to put a value on its cargo. Here is an extract: In the armada of 1708, the value of the cargo on the flagship alone exceeded Spain's annual national income from all sources. When the bullion and coins on all the galleons of the armada were totalled, it was two or three times Spain's annual income. The financial value of the shipment of 1708 is difficult to comprehend in today's (2011) terms. Given the relative buying power of silver in those days, which was far greater than it is today, the shipment would have exceeded $US50 billion. If the treasure were recovered and sold today, even allowing for the vastly reduced price of silver in recent years, it would still bring about $US2 billion, allowing for numismatic value of the silver coins, and some less significant multiplier for the stamped silver ingots. The items of greatest value on the San Jose were the gold bullion and coins. The 8 escudo coins in pristine condition would be valued in a range of $US5,000 to $10,000 each today. Other cargo of great value included jewellery, gem stones and church property. The galleons were lumbering bank vaults.

A team of Colombian and foreign researchers, including a veteran of the group that discovered the wreck of the Titanic in 1985, studied winds and currents of the Caribbean 307 years ago and delved into colonial archives in Spain and Colombia searching for clues.

Experts confirmed that they found the San Jose on November 27, "in a place never before referenced by previous research", Mr Santos said.

At least five other major shipwrecks were discovered when searching the ocean floor.

There could be up to 1,000 shipwrecks off the Caribbean coast of Colombia, but of those only between six and 10 had a large cargo of treasures, anthropologist Fabian Sanabria said.

The biggest find, and the most sought after, was the San Jose, he said.

The San Jose was sunk in June 1708 near the Islas del Rosario, off Colombia's Caribbean coast, during combat with British ships attempting to take its cargo as part of the War of Spanish Succession.

The galleon was the main ship in a treasure fleet carrying gold, silver and other valuable items from Spain's American colonies to King Philip V.

Only a handful of the ship's crew of 600 survived when the San Jose sank.

AFP