The wreck of Australia's first submarine HMAS AE1 has been found more than 103 years after it disappeared.

A new search effort to find the submarine started last week which located the old vessel in more than 300 metres of water off the coast of the Duke of York Islands in Papua New Guinea.

HMAS AE1 was lost off Rabaul in Papua New Guinea on 14 September, 1914 and the fate of her 35 crew members remained one of the significant mysteries of Australian military history.

After its discovery, the crew on-board the search vessel, Furgro Equator, held a small commemorative service for the officers and sailors who lost their lives back in 1914.

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Minister for Defence Marise Payne said she hoped the discovery would bring peace of mind to descendants of the HMAS AE1 crew.

"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," she said in a press conference on Thursday.

"We will work closely with the Papua New Guinea Government in the coming weeks and months to consider a lasting commemoration in recognition of the crew, and, importantly, to preserve the site.

"As Minister for Defence, I know there is no more solemn duty than for governments to send Australians into our harm's way, to defend our nation, to protect our way of life.

"So I think it is a very timely and fitting opportunity to acknowledge that we will never have forget those who have made the ultimate sacrifice. While it has 103 years, we have never given up on the search for those brave men."

Earlier, Ms Payne said the information and research of the submarine will be held in the Australian National Maritime Museum for future generations to remember.

- with additional reporting from Louise Cheer