The U-boat, a UB II-type submarine, was found between 82 and 98 feet below the surface, with damage to its upper deck.
Carl Decaluwe, the governor of Western Flanders, said the find on the floor of the North Sea is “unique”.
“It’s quite amazing that we found something like this,” he said.
“The impact damage was at the front, but the submarine remains closed and there are 23 people still onboard.”
The boat, which is 88 feet long and 20 feet wide and was found encrusted with barnacles and seaweed, appears to have struck a mine.
Two torpedo tubes have been destroyed but the lower tube is intact and closed.
Decaluwe, who said the U-boat was found by researchers, declined to provide details about its location until the site has been protected.
He has contacted the German ambassador because “we need to see what can do” with the remains.
Around 18 U-boats were stationed with the Flanders Flotilla in Bruges between 1915 and 1918.
Thirteen of them were destroyed and this is the 11th wreckage to be found in Belgian waters.
Allied warships and cargo ships were easy pickings for the German subs that were launched from Bruges, just across the English Channel.
A website, Uboat.net, tracks the submarines lost in both World War One and World War One, as well as casualties suffered by their staff.
According to the BBC, of the 375 German submarines that set sail from German ports in World War One, 202 were lost in action, and of 17,000 men who served, more than 5,100 lost their lives.
The German submarines, however, managed to sink 2,600 allied shipping vessels.
Earlier this year, unseen photographs of German World War One submarines washed up on the English coast were published for the very first time.
Historic England revealed the images to mark the centenary of Germany’s declaration of unrestricted submarine warfare on Britain.
Last year, the a German U-boat was been discovered at the bottom of the sea off the Scottish coast.
Experts believe it to be the UB-85, a submarine which was sunk by HMS Coreopsis in 1918.