Guangdong archaeologists used satellite navigation equipment to locate the sunken ship in early June. The vessel, dubbed South China Sea-II, is about 17 metres (55 ft) to 18 metres long and lying at a depth of 20 metres.

A preliminary study of the ship shows it may have sunk 400 years ago after striking a reef.

"These porcelain objects, mostly bowls, plates, pots and bottles, were believed to be produced in the Ming Dynasty (1368-1644)," Dr Wei Jun of the Guangdong Archaeology Institute, was quoted as saying. "They have a great archaeological value."

The wreck came to light when local police got wind of fishermen recovering ancient porcelain objects from the sea.

The sunken ship was found just a few days after China began salvage operations at another wreck site dating back to the days of the Song emperors, who ruled between 960 and 1279.

South China Sea I, discovered in 1987, was the first ancient vessel discovered in the area along the "Marine Silk Road" linking imperial China with the West.

Foreign smugglers were using advanced technology to steal China's seabed treasures, mostly porcelain from ancient shipwrecks. Many relics were being shipped to the United States and other antique markets.

Art collectors and dealers have been pursuing China's seabed heritage in earnest since early 2005, when about 15,000 pieces, mainly blue-and-white porcelain about 300 years old, were found in a shipwreck off the southeastern province of Fujian.