A former Australian army captain says he has uncovered the site of a World War II battle in Papua New Guinea, with the bodies of at least three Japanese soldiers still lying where they fell in 1942.

Brian Freeman, an expert on the Kokoda Trail, says local villagers led him to the Eora Creek site where he found the remains of the soldiers, along with their weapons and equipment.

"I never anticipated that we would find war dead," Mr Freeman said.

"As soon as we realised that Japanese and, potentially, Australian soldiers were buried at the site, we discussed with the villagers the need for those men to be identified and returned home," he said in a statement.

Mr Freeman said the battleground was known to nearby villagers but they had avoided the site, believing that it was haunted by the spirits of the dead.

The Australian Defence Force says it is investigating Mr Freeman's report.

Mr Freeman believes the site, about a kilometre from the village of Eora Creek, was the site of the last major engagement of a battle that proved a significant milestone in Australia's campaign against the Japanese in Papua New Guinea.

The Australian War Memorial attributes 99 deaths to the fighting there.

As the Japanese forces withdrew, they took positions on a ridge overlooking the Eora Creek crossing, giving them a strong defensive line against Australian offensives during six days of fighting in October 1942.

Mr Freeman, who has trekked the Kokoda Trail more than 35 times and holds the record for the fastest one way crossing at 24 hours and 59 minutes, discovered the lost battleground in April but had met with Australian and Japanese officials to inform them of the find before making it public.

He said he hoped the site would reveal the resting places of Australian and Japanese killed in action on Kokoda, so they could be identified and returned to their families for appropriate burial.

- AFP