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Experts are excited by the find because other than the effects of sea life, such as barnacles, coral and marine life, it is largely intact.
Amazingly the main undercarriage tyres remain inflated but the propellers clearly show the damage inflicted during the bomber's fateful final landing, experts have said.
Lifting it from the sea will use pioneering technology and but will be tricky because of tide and weather conditions.
Once it has been lifted, work will start to conserve and prepare the Dornier for display. The work will take place at the Michael Beetham Conservation centre, the RAF Museum's conservation centre at Cosford, Shropshire.
It will be placed in two hydration tunnels and soaked in citric acid for the first stage of its conservation. Once the delicate process is complete, the aircraft will be displayed at the museum's London site within the context of the Battle of Britain story.
Sonar scans by the RAF Museum, Wessex Archaeology and the Port of London Authority then confirmed the identity of the aircraft as the Dornier Do 17Z Werke number 1160.
Nicknamed the Luftwaffe's "flying pencil" bombers because of their narrow fuselage.
A platform is now above the wreck and divers have started to build a cage around the aircraft - working in 45-minute shifts - at the start of the salvage operation which should take around three weeks.
Work has started to raise the only surviving German Second World War Dornier Do 17 bomber from its watery grave in the English Channel.
The aircraft was shot down more than 70 years ago during the Battle of Britain and the project will be the biggest recovery of its kind in British waters, the RAF Museum said.
The existence of the aircraft at Goodwin Sands, off the Kent coast, became known when it was spotted by divers in 2008 at a depth of some 50ft lying on a chalk bed with a small debris field around it.