Seventy-eight years to the day since his heroic actions in World War II, Ordinary Seaman Edward 'Teddy' Sheean has become the first naval officer to be awarded Australia's highest military honour, the Victoria Cross.

In an investiture ceremony in Canberra on Tuesday, Ordinary Seaman Sheean was been honoured for his "remarkable gallantry, sacrifice and the significance of his actions to modern Australia".

In December 1942, the 18-year-old defied orders to abandon the rapidly-sinking HMAS Armidale off the coast of East Timor, which was under heavy attack by Japanese aircraft, and instead strapped himself to the ship's anti-aircraft gun and shot at enemy planes until he disappeared beneath the waves.

Chief of Navy Vice Admiral Michael Noonan said the Tasmanian sailor's efforts saved the lives of the ship's 49 crew, damaged two enemy aircraft and forced them to retreat.

"He gave his life so those who remained on the surface had a fighting chance at survival. Teddy did not choose sacrifice in an attempt to win a war, he did it to save his friends," he said.

Vice Admiral Noonan said Sheean's were "the shoulders on which our young Navy stood in our first major conflict and his are the shoulders on which our modern Navy now stands, proud and tall".

"His actions, his courage and his bravery that day in December 1942, while lasting mere minutes, lives on in our national psyche as the stuff of legend."

Governor-General David Hurley said "even just the bare bones" of the actions of the youngest member of the Armidale's crew should impress people.

"When we think about the ANZAC legacy these days, it's customary to describe that in four words: courage, endurance, mateship and sacrifice, and certainly that's what we see in Teddy Sheean's actions."

"A young man who displayed those values to the enth degree, as much as you could, left us a better country for it."

Dr Victor 'Ray' Leonard was 19 when he served alongside Sheean on the Armidale and he recalls the surviving sailors talking of Teddy's actions as they swam to safety.

"I silently thanked him as I swam as fast as I could … then I looked around and saw the last foot or two of Armidale disappear beneath the waves," he said.

"From the very beginning, he showed himself to have extraordinary strength, mental and physical, for a man of 18."

The long road to recognition

Sheean's family, historians and Tasmanian politicians have waged a decades-long campaign for just recognition of what has become one of the state's best-known war stories.

Born in the Latrobe area in north-west Tasmania in 1923, acknowledgement of his actions came locally first, with statues, a commemorative walk and even a weekly toast at the pub.

A 2013 inquiry found Sheean's actions "did not reach the particularly high standard required for recommendation of a Victoria Cross", and the United Kingdom's Ministry of Defence refused to consider him for the accolade in 2017.

The Federal Defence Honours and Awards Tribunal held hearings across the country as part of a second inquiry in 2019, which unanimously recommended to the Government he should be awarded a Victoria Cross.

Defence Minister Linda Reynolds and Prime Minister Scott Morrison rejected the tribunal's recommendation, earning the ire of many, including Tasmanian independent cross-bench Senator Jacqui Lambie.

In June this year, Mr Morrison created a second expert panel, headed by former head of the Australian War Memorial Brendan Nelson, to re-examine the case for the Victoria Cross.

The panel also recommended Sheean receive the honour — a decision the Government accepted and the Queen approved in August.

Though the path has been long and littered with setbacks, Dr Leonard said Sheean always did have a knack of making himself heard.

"During a quietness, one voice would raise stronger than any other it would be Teddy's," he said.