150-year-old mystery solved but $500 million is still trapped underwater

A 150-year-old mystery maritime has been solved after divers came across the wreck of the City of Hobart in Australia.

The iron steamer carrying coal from Newcastle to Melbourne sank to the bottom of the ocean in 1877.

Its propeller shaft snapped and pierced the hull, causing it to sink and the captain and crew escaped in lifeboats and were rescued the following day.

Divers led by Mark Ryan had been searching for the wreck since 2007 without any luck.

"It clearly wasn't there. We knew we were close," Ryan, the co-founder of Southern Ocean Exploration, said to 7News.

That was until a wind farm survey ship accidentally detected the wreck just outside the team’s search area, about 30 km off the coast of Gippsland.

It allowed them to finally confirm its identity after nearly 20 years of searching.

A 150-year-old mystery maritime has been solved (YouTube/7News)

The discovery solves one of many maritime mysteries in Victoria, where only about half of the 660 known shipwrecks have been found.

However, the biggest missing prize remains the Madagascar, a ship that vanished in 1853 carrying Victorian gold now estimated to be worth around $500 million.

The find would be considered 'the discovery of the century'.

The team behind the discovery of a shipwreck off the coast of Gippsland suggest that the 'holy grail' is still out there (YouTube/7News)

"To dive a wreck for the first time is amazing. To be the very first team on the wreck is mind blowing," Ryan added.

"Man, we've done it. We've got the city of Hobart. Such an amazing feeling.

"We'd been looking for this wreck for nearly twenty years."

Historian Peter Taylor said: "Captain and crew had very little time getting the lifeboat and start rowing back to shore. Unfortunately, a ship was passing by the next day and pick pick them all up."

'To be the very first team on the wreck is mind blowing' (YouTube/7News)

Renee Kurowski, senior manager stakeholder engagement at Iberdrola Australia, added: “We are pleased that initial investigations for the Aurora Green project were able to contribute to verifying the identity of two important pieces of Australia’s and Victoria’s maritime history.

“Finds like this aren’t just fascinating, they’re important cultural records and protecting them ensures these pieces of our history are documented for future generations.”

Kurowski continued: “This exciting find will help build a clearer picture of Australia’s maritime history.

“We appreciate the expertise and collaboration of SOE and the Commonwealth and Victorian heritage teams, in providing us with valuable insights into the two shipwrecks.

“As we progress through the development of Aurora Green, we remain committed to working with heritage authorities to ensure significant sites are respected and protected.”