Scientists using underwater robots have discovered remnants of the Pink Terraces on the floor of Lake Rotomahana, near Rotorua.
The terraces, once described as the eighth wonder of the natural world, were buried in the eruption of Mt Tarawera in 1886.
They were rediscovered this week during a joint New Zealand and American mission to map the lake floor and investigate geothermal activity at Lake Rotomahana.
Project leader Cornel de Ronde, of GNS Science, said his team was elated at the discovery.
He is "certain" they have found the remains of the terraces.
"The first sonar image gave a hint of a terraced structure so we scanned the area twice more and we are now 95 per cent certain we are seeing the bottom two tiers of the Pink Terraces.
"This discovery puts to rest more than a century of speculation as to whether any part of the Pink and White Terraces survived the eruption.
Highlights in a science career don't come any better than this."
Data collected by robot underwater vehicles show crescent-shaped terraced structures in about 60m of water where the Pink Terraces were located prior to 1886, said Mr de Ronde.
Underwater photos also show terrace edges among the lake floor sediments.
Dr de Ronde said the rest of the Pink Terraces were either destroyed during the eruption, or were still concealed under thick sediment.
There was no sign of the larger White Terraces in the part of the lake that matched their location prior to 1886, he said.
The Pink and White Terraces were separated by several hundred meters before the eruption.
Discovering the remnants of the terraces would not have been possible without underwater technology and camera systems brought to New Zealand by Woods Hole Oceanographic Institution, said Mr de Ronde.