Australian soldiers were taken as prisoners by the Japanese army in early 1942 after losing a battle on Rabaul, a township in a volcano-pocked corner of modern-day Papua New Guinea.

On June 22 1942, the prisoners of war were loaded onto Japanese ship Montevideo Maru.

By July 1, the ship had sunk after being struck by missiles from the US submarine USS Sturgeon off the Philippines, killing all 1,053 prisoners and civilian internees.

It took three months for the Australian government to alert the families of those on board

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80 years on, Bendigo RSL president Peter Swandale said it was important families gathered to remember the lives lost.

"For families this is their part of being engaged in that remembrance," he said.

"It's very important for the families that they are able to remember the sacrifice of their loved ones."

Relatives were invited to lay a wreath for fallen soldiers at the commemoration ceremony.

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