LOS ANGELES (AP) _ Salvagers announced Tuesday they have discovered the wreck of the 1848 sidewheel steamer Atlantic with an experimental 19th century submarine atop it in Lake Erie.

The Atlantic, running as a casino, went down on Aug. 20, 1852, after colliding with a freighter near Buffalo, N.Y. The Phillips submarine sank during an 1853 attempt to locate the wrecked steamer.

The 266-foot Atlantic, with 35-foot diameter paddle wheels, was located by Mar Dive Corp. of California in the summer of 1989.

''We knew we found it when we saw it. We could tell just by the size of her wheels,'' said Mar Dive president Steve E. Morgan.

As much as $60 million in gold could be aboard the ship, Mar Dive's Chuck Highbaugh told a Los Angeles Press Club news conference.

Identification of the wreck was confirmed in June 1990 when a piece of the ship's china was recovered. The salvage firm postponed announcing the discovery until rights to the wreck were secured.

The Atlantic was built in 1848 and went into service the next year. After it went down it became known as the ''phantom of the lake.''

More than 300 people are believed to have died, making it the fifth worst shipping disaster on the Great Lakes.

The Atlantic is well preserved and the salvagers want to raise it.

The early submarine found on the wreck was invented by Lodner Phillips in 1851 and is believed to have gone down on its second attempt to locate the wreck of the Atlantic.