Acting Minister for Veterans, Geoff Lee, said the SS Wollongbar II was confirmed by archaeologists from Heritage NSW after it was reported by the local community.

"In 1943 a Japanese submarine, the I-180, destroyed the freight vessel with two torpedos killing 32 people on board," Mr Lee said.

"The ship sank in minutes with only five crew surviving the attack."

The SS Wollongbar II was one of many vessels lost to enemy assault along the eastern coastline during WWII.

"We have just commemorated our brave veterans on ANZAC Day but it's also important to remember the toll of war for everyday Australians," Mr Lee said.

"This secret has been hidden at the bottom of the deep sea for decades and the find will give some closure for descendants and relatives of the 32 people who lost their lives."

Local MP Melinda Pavey said a significant part of the Mid North Coast's wartime history has been solved with the shipwreck's discovery.

"The Crescent Head and Port Macquarie fishing industry cooperated brilliantly to help solve this mystery and I want to congratulate Heritage NSW for its important leadership," Mrs Pavey said.

When the vessel sank, it was carrying boxes of butter and bacon which eventually washed up on the shore resulting in a boom in cake making, which was normally restricted by wartime food rationing.

Director of Heritage Operations at Heritage NSW, Tim Smith OAM, said the discovery will reveal some amazing stories.

"We want relatives of those who sailed on the SS Wollongbar II to get in contact, so we can share findings of the survey conducted by our archaeologists," Mr Smith said.

The Wollongbar II was a single screw steamship owned by the North Coast Steam Navigation Company Ltd. At 2239 tons and 87 metres in length, the vessel had been built at Lithgow's Ltd shipyard at Port Glasgow, Scotland in 1922.

Wollongbar II was built to replace an earlier steamer of the same name wrecked at Belongil Beach, Byron Bay, in 1921.

On April 29, 1943, the merchant ship Wollongbar II was torpedoed and sunk by the Japanese submarine I-180 off Crescent Head when she was on a voyage from Byron Bay to Newcastle.

Out of a crew of 37 only five survived. Onboard was a cargo of 18,000 cases of butter, sugar and bacon.

Just the day before, the vessel was searching for survivors of the freighter Limerick torpedoed and sunk off Ballina on April 26. This loss was attributed to I-177.

Captain Toshio Kusaka boldly surfaced I-180 only 450 metres from Wollongbar at 10.15am on April 29. Captain Charles Benson (59) and the Chief Officer Will Mason saw the conning tower submerging into a bubbling sea and a torpedo, already fired, bouncing erratically at them at speed. There was no time even to sound the emergency alarm.

Captain Benson bawled "look out for yourselves, boys", then went down the port ladder. The lookout man also left the bridge as Able Seaman Roy Brown remained at the wheel. Mason later recounted how the "torpedo struck us just forward of the bridge with a terrific thud" near Number 2 hold.

Within moments another torpedo slammed into the port side which "suddenly exploded with a thunderous crash". Survivors told how the ship broke in two, with the bow and stern rising sharply into the air.

Wollongbar II sank within two minutes, taking Mason deep under water until he "shot up like a jack-in-the-box". He first clung to a box of butter, then a life ring, transferring to a damaged lifeboat from the ship. Engine room greaser Frank Emson was draped across its bows, having been badly scalded by a steam pipe with skin hanging off his arms and hands.

Two sailors, Roy Brown (who had been at the ship's wheel) and Pat Tehan rowed to them. Both men were uninjured, and they placed Emson on the raft and towed it behind the boat. The four men inspected a few other empty rafts and then saw another with fireman Blinkhorn waving a piece of white wood.

Mason described how, "When we picked him up his clothes were still dry. He told us that he was thrown by the explosion out of a bunker and landed on (the) raft ... quite happy and unhurt".

A Catalina flying boat was miraculously passing above them and saw the terrific tower of water from the explosions; even seeing the submarine at periscope depth before it descended into deep water. Being unarmed, it could only provide moral support, flying around the 'circle of devastation' and seeing the five men scrambling onto the rafts and boats.

Captain Benson had rigged the ship's boats and rafts so that if the vessel sank, they would float free.

The aircraft left the scene and dropped a message onto the town wharf at Crescent Head advising of the disaster. The five survivors stayed for about an hour among the wreckage and thousands of cases of butter looking for others, dead or alive, but found no one.

The men began to row towards the coast and when about two miles off at about 4pm, were collected by the Radley family's local fishing trawler, XLCR (Excelsior), sent to their aid.

One survivor remarked that "I knew the XLCR would come to rescue us", as they also operated as the town's rescue boat (Radley 2019).

The vessel still operates today out of Port Macquarie and is used as a training vessel for the Newman Senior Technical College.

The captain and crew of the vessel (father Capt. Thomas Radley and brothers' Claude, Mervyn and Russell, along with Arthur Beattie and Raymond Smith) were all awarded Bravery Certificates by the Royal Shipwreck Relief and Humane Society of NSW for their efforts in rescuing the survivors despite, the grave peril they placed themselves in by doing so.