Searchers have been combing a 120,000-square-kilometer (46,000-square-mile) part of the Indian Ocean since last year but have yet to turn up any trace of Flight 370. A wing flap was found in July on the other side of the Indian Ocean, washed up on remote Reunion Island.
The new analysis by an agency of the Defence Department confirmed "the highest probability" the final resting place for the plane is within the current search area, the government said in a statement.
Australia's Deputy Prime Minister Warren Truss said the new analysis pointed to the aircraft most likely coming to rest in the southern part of the current search area, so searchers would focus on that location and slightly widen the boundaries of their search area there.
"We remain hopeful, indeed optimistic, that we will still locate the aircraft. There's around 44,000 square kilometers yet to be searched in this new priority area," Truss said.
He said the new analysis used a different methodology but came to the same conclusions about where to search, giving authorities "real encouragement" they were on the right track.
He said China would soon contribute a ship and 20 million Australian dollars ($14.6 million) to the search effort, marking its first financial contribution.
"We are particularly grateful for this commitment from China because that will help ensure that there are adequate finances," Truss said.
In total, the search is expected to cost 180 million Australian dollars, with Australia contributing 60 million Australian dollars and Malaysia contributing 100 million Australian dollars, he said.
The Boeing 777 vanished with 239 people aboard on March 8, 2014, during a flight from Kuala Lumpur, Malaysia, to Beijing. Authorities are baffled by how and why it disappeared. Among those who died were 153 Chinese nationals.
The current seabed search more than 1,800 kilometers (1,100 miles) southwest of Australia began in October last year. Ships using side-scan sonar and an underwater drone fitted with a video camera have so far scoured more than 70,000 square kilometers (27,000 square miles) of rugged terrain.
The search area is based on analysis of scant satellite information that tracked the final hours of Flight 370.
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