Defence Minister Marise Payne said a survey ship found the submerged MV-22 Osprey in Shoalwater Bay shortly after starting its search.
Twenty three people were rescued when the aircraft crashed on Saturday, but three remain unaccounted for.
Rescue operations were called off early Sunday morning.
The three US Marines were identified as Pfc Ruben Velasco, Cpl Nathaniel Ordway and 1st Lt Benjamin Cross.
The aircraft, which is normally based in Okinawa, Japan, ditched into the water during a training exercise on Saturday. It is not clear what caused the incident.
The US military says recovery and salvage work could take months.
American military forces have been operating in the area as part of a joint training exercise called Talisman Sabre.
The MV-22 Osprey is a tilt-rotor aircraft similar to a conventional plane but has helicopter-like rotor blades which allow it to take off vertically, without a runway.
There have been a number of incidents involving Ospreys in the past, including a crash off the coast of Okinawa in December 2016 that injured five crew members.
The deployment of Ospreys in Japan is unpopular with local residents, and Japanese Defence Minister Itsunori Onodera has asked the US to ground its Japan-based fleet until the cause of this crash is known.
Australian navy searchers have located a US military aircraft that crashed off the Queensland coast, leaving three Marines dead.