The wreckage of a sunken vessel believed to be from the Spanish Armada has been discovered off the Donegal coast.

Underwater archaeologists are to explore the historic wreck, located in shallow waters in Rutland Harbour, near Burtonport.

Evidence uncovered during a dive survey revealed the vessel was likely to be a 16th-century ship, possibly part of the 1588 Spanish Armada.

Heritage minister Jimmy Deenihan has granted 50,000 euro for the excavation by the underwater archaeology unit from his department's National Monuments Service.

He said the discovery was a major find of significance not only to Ireland but also to the international archaeological, historical and maritime communities.

"If, in fact, it proves to be an Armada vessel, it could constitute one of the most intact of these wrecks discovered to date," he said.

"It could provide huge insight into life on board and the reality of the military and naval resources available to the Armada campaign."

Up to 24 ships of the 130-strong ill-fated fleet were wrecked along Ireland's rocky coastline. The location of the latest vessel means the search team will have better than usual access to find any artefacts that may still be on board.

Nearly 10,000 pieces of valuable treasure were discovered on the biggest ship in the fleet, the Girona, which sunk off the Antrim north coast in October 1588. The haul brought ashore by divers included hundreds of gold and silver coins, gold chains, pendants, rings and cameos containing inset rubies and pearls, silver forks and spoons, the ship's anchor, cannons and cannon balls.

Mr Deenihan said the Geological Survey of Ireland is supplying one of its research vessels, the RV Keary, free of charge as the main dive vessel off Donegal and will also carry out detailed marine geophysical surveys in the vicinity of the wreck.