This discovery has also enabled NOAA researchers to set the record straight about the role of Chinese crewmembers after the collision.
The iron and wood steamship City of Chester is resting some 217 feet deep at the bottom of the channel just inside the Golden Gate Bridge. Sonar images show the ship's wreckage standing upright.
On August 22, 1888, a dense fog enveloped the Golden Gate Channel. The steamship, with 106 people aboard, was leaving the bay. The Oceanic, a ship twice as large, was coming in from Asia.
"The Oceanic had a manifest of 74 Chinese crewmen that were aboard, 27 Caucasian officers," said Robert Schwemmer with the NOAA Maritime Heritage Program.
Schwemmer adds, "They had less than a half mile visibility. So they were that close."
Not only was there dense fog, a flood tide was churning the waters along with a fierce riptide. All of it was affecting the City of Chester's navigation.
"It was fighting the riptide in that current," Schwemmer said. "So the bow of the Oceanic penetrated the hull of the City of Chester ten feet. It was described as a knife cutting through cheese."
After the collision, scientists at that time surveyed the area, mapping where they thought the ship sank. But for more than a century, no one had located the City of Chester until last May, when one of NOAA's sonar equipped boats found it, using the old survey as a guide.
Laura Pagano, a NOAA physical science tech who was on that boat, said her team was overjoyed.
"We were incredibly excited," she said. "I think we all stood up and cheered."
The discovery of the ship is also giving NOAA researchers an opportunity to clear up accusations made at the time about the Chinese crewmembers of the Oceanic.
"There was a lot of racism at the time, that the Chinese crewmen had not responded favorably to rescuing people," Schwemmer said. "They were the ones on the bow of the Oceanic pulling survivors from the City of Chester aboard their ship and diving into the water, saving one child."
A sketch on the cover of the San Francisco Examiner depicts the rescue of that child.
Thirteen passengers, including two children, and three crew members, died in the collision.