According to the Swedish coast guard, the submarine is a German U-boat which was hit towards the end of the war, and is one of 249 wrecks off the west coast of Sweden.
Authorities were alerted by a local man fishing in the area who spotted oil on the water.
The coast guard says the wreck lies at a depth of 65 metres, and that the vessel had 113 tonnes of diesel oil on board when she sank.
The submarine also contains unknown quantities of lead in large battery units.
An operation to extract the oil and lead is however unlikely, as unexploded torpedoes remain on board.
The wreck is just one of the many submarines and ships lying in Swedish waters. Experts fear the high salt content in the area will ultimately erode many of the hulls resulting in severe environmental damage.