It was found in the eastern approaches to the Firth by the lighthouse tender, Pharos, using sonar equipment.
The upturned hull of the Cemfjord - which was carrying cement - was spotted by a passing ferry on Saturday and sank the following day.
No trace was found of its crew despite a huge search operation.
The seven Polish nationals and one Filipino who were on board did not have time to send out a distress signal.
A liferaft from the cargo ship has also been discovered drifting in the Pentland Firth, but coastguards said there were no signs of life on board and that the liferaft had not been used.
The Shetland coastguard helicopter was sent to investigate at 14:00 on Monday after a passing vessel reported seeing the liferaft.
A winchman was lowered on board but found no signs that anyone had used it.
The ship was carrying 2,000 tonnes of cement and had been sailing from Aalborg in Denmark to Runcorn in Cheshire when it sank. It had been due to arrive on Monday.
Operators Brise of Hamburg expressed "great sadness" that the extensive air and sea search had found no trace of the missing crew.
The last confirmed sighting of the ship was at about 13:00 on Friday.
It is understood the alarm was raised by the crew of the ferry Hrossey at 14:30 on Saturday.
The Hrossey, which was sailing to Aberdeen, spent time in the area looking for survivors.
An investigation into the circumstances of the accident is ongoing.
The Scottish government is expected to update the parliament on the accident during topical questions after 2pm, which you can watch live or on demand at BBC Scotland's Democracy Live website.
The wreck of the cargo ship Cemfjord, which sank in the Pentland Firth with eight men on board, has been located on the seabed.