One of Australia’s oldest naval mysteries has been solved after the discovery of the wreck of the country’s first submarine – more than 103 years after its disappearance in the First World War.

The AE1 vanished off the New Guinean island of New Britain on September 14 1914, with 35 crew aboard from Australia, New Zealand and Britain.

It was the first Allied submarine loss of the war, yet the exact reason for its sinking remains unclear.

No fewer than 12 fruitless hunts for the sub had been carried out over the past several decades, but Australian Defence Minister Marise Payne said yesterday it had been found nearly 1,000 feet below the surface in a search using a Dutch-owned survey vessel that started only last week.

While the reasons for the submarine’s sinking remain unclear, Payne said the Australian government was now trying to contact descendants of those killed on board.

“It was the first loss for the RAN and the first Allied submarine loss in World War I – a significant tragedy felt by our nation and our allies,” Payne said.

She added that a commemorative service was held to remember those who died after the vessel was found. Australia will now discuss with the Papua New Guinean government the building of a lasting memorial and ways to preserve the site.

The AE1 made final contact with an Australian ship at 2.30pm the day it disappeared. Mystified villagers on a nearby island at the time spoke of seeing a “monster” or “devil fish” that appeared and quickly disappeared into the water.