Possible clue found in hunt for AE1 sub

The navy has found an object that warrants further investigation during its hunt in Papua New Guinea for its lost first submarine.

HMAS AE1 and its 35 crew disappeared without trace a hundred years ago after taking part in the capture of German New Guinea during World War I.

Navy minehunter HMAS Yarra searched for it in the Duke of York Islands between September 6 and 9, before the September 14 commemorations to mark the loss of the British-built vessel.

The sonar search resulted in numerous "contacts of interest", many of which turned out to be natural objects.

"However, one contact remains unidentified and will require further investigation," Defence said in a statement on Wednesday.

These types of contacts are frequent in the region due to large, rocky outcrops and ridges along the seabed, as well as battle debris from World War II.

The seabed is a very steep volcanic shelf and the water deepens quickly away from the coast.

The AE1 was the Royal Australian Navy's first submarine. It disappeared off New Britain after less than seven months of service.

The navy had designated an area around Mioko Island for the search, taking account of the last sighting of AE1 by HMAS Parramatta and previous searches, as well as historical records and oral history.

Mioko Island locals had spoken of a "monster" that approached the reef and then moved away northeast before disappearing, the Yarra's commanding officer, Lieutenant Commander Brendan O'Hara, said in a statement.

Defence says it would be inappropriate to disclose the exact location of the contact until it is properly identified.