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"This is a gigantic find," Malcom Dixelius, head of Deep Sea Productions which led the expedition, told AFP.
The wooden ship, whose name Svaerdet means The Sword in English, sank in 1676.
It went down with its sister ship the Kronan, or Crown, in the largest naval battle in the Baltic, when Sweden was defeated by a Danish-Dutch fleet. Some 600 sailors and soldiers perished on the Svaerdet.
Ther wreck of the Kronan was found in 1981.
The Svaerdet was built in 1642 as one of the biggest warships of its day, according to Deep Sea Productions, noting that is "a prime example of richly decorated 'gaudy' ships, built largely to impress the enemy."
The ship "is a national legend in Sweden," Dixelius said.
"She was the ship that fought against the Danes for five hours and when the ship in the end stood in flames, the admiral said 'You won't take me alive, and the Danes won't get my ship. Let it burn,' and it went down with 600 men onboard," he said.
Dixelius would not reveal the exact location of the wreck because "it's not in Swedish waters" and therefore not a protected site.
"The Baltic Sea is very complicated... Different countries interpret the laws in different ways," he said.
"What is important is that we know where it is and we will help scientists to investigate it. We are working with colleagues who found the Mars, since these two ships are fairly close to each other and have a common history," he added.
The Mars sank in 1564 and was found last spring.
Both the Mars and Svaerdet "are untouched," Dixelius said.
"No one has been on them. Both the Vasa and Kronan were stripped in the 1600s. Here all the cannons are still there. They probably knew in the 1600-1700s where these wrecks were, but couldn't get at them, because they were so deep," he said.
Earlier this year, Sweden celebrated the 50th anniversary of the raising of the Vasa, another 17th century royal warship that was the jewel of the Swedish navy when it sank in Stockholm harbour just minutes into its maiden voyage in 1628.
It is now housed in a Stockholm museum built especially for it, and is the biggest tourist attraction in Sweden.
"Mars, Vasa, Kronan and Svaerdet are the four wrecks in the world from this time that have been conserved almost fully ... simply because the Baltic is so good at conserving wrecks," Dixelius said.
The cold water and low salt levels prevented rot and rust and was also inhospitable to ship worms, he explained.