Israel on Tuesday displayed a 900-year-old sword believed to have belonged to a crusader, found by a scuba diver off the Mediterranean coast.

The Israel Antiquities Authority said diver Shlomi Katzin came across the iron sword, now encrusted in marine organisms, after shifts in the sand left it exposed.

"The sword, which has been preserved in perfect condition, is a beautiful and rare find and evidently belonged to a crusader knight," Nir Distelfeld of the IAA said in a statement.

The IAA said the Carmel coast area where the sword was found was used through the centuries by ships seeking shelter from storms due to its many coves, leaving various "rich archaeological finds".

Kobi Sharvit of the IAA's marine archaeology unit said the trend of divers finding precious artefacts was growing.

Even though professionals are constantly surveying underwater areas, divers are often the first to spot a treasure just unearthed by recent sand shifts, he said.

The sword is to be cleaned and analysed before it is put on public display.