The Saab 340B aircraft, operated by Regional Express, had been flying from Albury to Sydney on March 17 last year.

Problems were noticed with an engine about 350 kilometres out of Albury and the crew began to undertake a checklist to fix the issues.

As the items were completed, the crew experienced minor vibrations coming from the right engine which worsened.

An engine shutdown procedure was undertaken.

The propeller fell off during the shutdown, leading to an urgent radio call to air traffic control.

The plane landed without incident or injury to the 16 passengers and three crew.

The propeller was found by police in dense forest four days later.

Rex grounded five planes with the same type of propeller gearbox after the incident and had undertaken 12 inspections of the gearboxes by mid-June last year.

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Two external audits were also conducted on Rex.

The Australian Transport Safety Bureau investigated the incident and released its findings on Wednesday.

It found the propeller gearbox shaft had fractured as a result of a fatigue crack in a component. 

The ATSB found engine manufacture General Electric, did not have specific inspection procedures to detect fatigue cracking of the propeller staff, and inspection worksheets did not allow findings to be recorded.

ATSB chief commissioner Greg Hood said the cause of the fatigue could not be determined, but and said it was a rare occurrence. 

General Electric made changes after the incident requiring more detailed engine inspections.