The Royal Australian Navy believes the team it sent to Christmas Island may have found the site of the grave of an unknown sailor.

The body of a sailor was recovered on Christmas Island on February 6 1942 and subsequently buried in an unmarked grave. A parliamentary inquiry deemed it as "highly probable" that the sailor was from the ill-fated cruiser HMAS SYDNEY, lost with all hands after a desperate fight with the German raider KORMORAN.

During the week June 8-14, the four-person team, led by LCDR Richard Chartier from Navy Headquarters in Canberra, narrowed the search field to an area of about 12 square metres and believes they may have identified a possible location of the unmarked grave within that area.

Team member Mr Kevin Lourey, who spent 20 years on Christmas Island as a civil engineer from 1949, was then able to identify a grave-sized area which has been set aside for eventual excavation.

However, any remains may not reveal the identity of the unknown sailor.