The discovery of the wreckage, at the heart of the worst maritime disaster in Australia’s history, was announced on Saturday.
The ship was sunk when it was torpedoed in July 1942 by a US submarine, about 120km off the northern coast of the Philippines.
The vessel sank within 11 minutes, and all prisoners on board died.
Almost 1000 Australians lost their lives in the disaster and the Stanhope community unveiled a mural and plaques to honour the fallen in a ceremony last week.
About 20 Japanese crew members and guards also died in the sinking.
Stanhope RSL sub-branch president Phil Chapman said the coincidence of the mural opening and the discovery of the wreckage was incredible.
“It was incredible after 80 years, to see the two things happening within a week,” he said.
“I know how emotional some people were at the opening of the mural, so the news of the discovery will have a big impact on the people connected.
“I think there will be a lot of tears shed.
“From reports, I think the wreckage is deeper than the Titanic, so it will probably be well preserved.”
Australian War Memorial chair Kim Beazley said the discovery of SS Montevideo Maru in the South China Sea almost 81 years after the tragedy was a “monumental moment in war history”.
Mr Beazley’s uncle Syd Beazley was among those lost in the tragedy.
“Finding the site of Australia’s most devastating loss at sea ... will help heal Australia’s collective memory for generations,” Mr Beazley said.
“This has solved a Second World War mystery and my family’s history.”
Mr Beazley’s uncle was a resident of Rabaul in New Guinea’s East New Britain Province, and was on board the ship.
“This discovery is connected to an enormous Australian tragedy, both from massacres on land and the huge loss of life at sea,” Mr Beazley said.
“This is a monumental moment in history and for the families who have agonised and grieved about what happened to their loved ones on this ill-fated ship.”
In 2009 Mr Beazley joined a group of relatives urging the Federal Government to launch a search for the wreck.
“The families on the ship were unaware of their loves ones’ fate until after the war,” Australian War Memorial director Matt Anderson said.
Last year, families of those who died marked the 80th anniversary of the tragedy at the Australian War Memorial.
The Australian War Memorial commemorates the tragedy through a commemorative sculpture and its Roll of Honour.
