An expedition has returned after uncovering new clues about what happened to Australia's first submarine, HMAS AE1.

The vessel disappeared in September 1914, with all 35 crew on board, and its fate was Australia's greatest naval mystery until December last year, when the submarine wreck was found near Duke of York Island in Papua New Guinea's east coast.

The last known image of AE1, with HMAS Yarra and HMAS Australia in the background, taken on September 9, 1914. ( Supplied: Sea Power Centre )

Australian National Maritime Museum Archaeologist Dr James Hunter said AE1 disappeared while on patrol with HMAS Parramatta.

"They were on patrol for German war ships, this is shortly after the allied assault on what was German New Guinea," he told PM.

"There was an expectation that there might be some German naval vessels and gun boats lurking around, so Parramatta and AE1 were part of a contingent of vessels that were sent out to patrol various areas around Rabaul," he said.

AE1's loss was the first Royal Australian Navy, and allied, submarine loss of World War I.

Dr Hunter said it was also a huge blow to a young country.

"It was a massive hit to morale, because it was two of the most state-of-the-art weapons that Australia had in its military arsenal," he said.

An artist's impression of HMAS AE1 settling on the seabed ( Supplied: Australian Government Department of Defence )

"For this submarine to go out in the early days of its first war time service, and to disappear without a trace was absolutely crushing."

There have been plenty of theories over the years as to what happened to the submarine, including that it was sunk by a German ship, or even that HMAS Parramatta accidentally hit it and sunk it.

But what is most likely is that the AE1 ran into trouble on a dive and was crushed from the water pressure, sending it to the ocean floor.

When the lights go on

Using a research vessel owned by Microsoft co-founder Paul Allen, a joint US-Australian expedition sent a remotely-operated vehicle (ROV), armed with high-definition cameras, to the wreck to gather evidence.

The R/V Petrel ( Supplied: Paul G.Allen, Find AE1, ANMM, Curtin University, Navigea Ltd )

Expedition co-ordinator Rear Admiral Peter Briggs said what they found shocked them.

"It's still an amazing kick when the lights come on for the first time in 103 years… on the wreck, and there was the stern," he said.

HMAS AE1 fin and implosion rubble over control room. ( Supplied: Paul G.Allen, Find AE1, ANMM, Curtin University, Navigea Ltd )

"Amazingly, the stern cap, the opening on the rear torpedo tube is fully opened, we didn't expect that at all.

"It's certainly a deliberate action from the crew, it requires quite a few turns on a hand wheel to physically open it, it's the first step in preparing a torpedo tube for firing," RADM Briggs said.

The Remote Operated Vehicle control room onboard R/V Petrel. ( Supplied: Paul G.Allen, Find AE1, ANMM, Curtin University, Navigea Ltd )

But the team doesn't think the crew took any other steps towards firing a torpedo.

Instead, they believe the tube was open in case they came across a German ship, or as part of an exercise.

Rear Admiral Peter Briggs said the wreck was covered in sea life, which was an amazing sight.

HMAS AE1 bridge steering position. ( Supplied: Paul G.Allen, Find AE1, ANMM, Curtin University, Navigea Ltd )

"We were able to, with the manipulator arm, to peer into the torpedo tube, upsetting a resident large eel, and a nice crab, who were a bit dismayed to find their sanctuary being invaded by a modern camera on a robot arm," he laughed.

The Remote Operated Vehicle is retrieved from the ocean. ( Supplied: Paul G.Allen, Find AE1, ANMM, Curtin University, Navigea Ltd )

The expedition team are using the HD video gathered to create a 3D image of the wreck, and are consulting with experts to try and come to a conclusion about what actually happened to HMAS AE1.

The team also paid tribute to the men who lost their lives in the accident by planting the flags of Australia, New Zealand and the United Kingdom in the ocean floor, next to the wreck.