The wreckage of HMAS Sydney, sunk by a German cruiser off the West Australian coast during World War II, has been found.

The Sydney's entire crew of 645 went down with the ship in the Indian Ocean in November, 1941.

The ships's location has been a mystery for more than 66 years.

It was announced yesterday that the wreckage of the German cruiser, Kormoran - which is believed to have sunk the Australian warship - was found in waters about 800 kilometres north of Perth.

HMAS Sydney was located yesterday, about 22 kilometres from the Kormoran.

Mr Kevin Rudd, Australia's Prime Minister, said: "I'm advised that the HMAS Sydney was found some 12 nautical miles from the Kormoran, some eight nautical miles from the scene of the principal battle site and at a depth of some 2,470 metres," Mr Rudd told reporters in Canberra.

Mr Rudd said the hull has been found largely intact.

Mr Rudd said the federal government hoped the find would bring some closure for the families of the 645 sailors who went down with the ship.

He said the Australian Defence Force would be communicating with family members.

"They will be using their own communications systems to make sure that the surviving family members of the crew of HMAS Sydney are informed of this discovery as soon as is practically possible," the prime minister said.

Mr Rudd said the occasion was a day which began a process of closure for many families of the crew of the Sydney.

"It's also time for the nation to reflect on the bravery of all of those who gave their lives in defence of their country in this particularly bloody and brutal engagement," he said.

Mr Rudd said it would be a hard day for family members associated with the Sydney.

"This is over 65 years ago, but pain and family loss even at 65 years removed, is still pain, and very deep pain," he said.

"On behalf of the government I would say to all those members of the families of the brave members of the crew of the HMAS Sydney that the government extends to them our condolences for the loss of these brave young men."

He also confirmed Environment Minister Peter Garrett was in the process of issuing an interim protection declaration in relation to both the Sydney and the Kormoran.

"The environment minister will be issuing a full statement a bit later in the day, but I'm advised it provides immediate and early protection of the sites against any unauthorised intrusion," he said.

"But the provisions of the historical shipwrecks act come into force as the consequence of that interim order.

"It is the protection mechanism we have available to us under Australian law through that act ... of 1976."