The remains of the first of the soldiers, unearthed after lying in an unmarked mass grave for 94 years near the rural village of Fromelles, was reinterred at a new military cemetery in the town on Saturday.
Most of the remainder will be laid to rest during similar ceremonies throughout February, with the hope that as many as possible can have headstones bearing their names by the time the cemetery officially opens in July 2010.
DNA has been extracted from each of the soldiers' remains so they can be matched against samples provided by living descendants and hopefully identified.
Hundreds of Australians and Britons have already come forward, believing they have a long lost relative who could be among the 250 soldiers, who were all killed during the notorious Battle of Fromelles on July 19, 1916.
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But DNA experts fear only about 100 at the most will be identified unless more people with links to diggers who disappeared at Fromelles come forward and offer DNA samples.
The battle was the worst in Australia's military history, with 5533 casualties in just 24 hours.
Of the 1780 Australians who died, an estimated 1299 have no known grave.
About 190 are thought to have been recovered by German troops and buried in the unmarked mass grave found near Pheasant Wood on Fromelles' outskirts.
Given the large number of missing soldiers from the battle, DNA experts need as many relatives as possible to come forward to help identify those from the mass grave.
"At the very best... the most we are likely to match is about 100," said Dr Peter Jones, the DNA consultant for the project on identifying the soldiers.
"But what we would really like is more family members to come forward over the next four years so they can go into the process as well."
Dr Jones said good quality DNA had been extracted from each of the soldiers' remains, raising hopes of identifying them as long as a living relative is found to provide a match.
An official identification board will start considering in March which soldiers can be named based on the DNA results as well as archaeological, anthropological and historical evidence relating to the soldiers found at Fromelles.
Veterans Affairs Minister Alan Griffin said it was too early to speculate how many would be identified.
"We're certainly confident that there will be quite a few graves that will be named," he told reporters.
"But obviously that's something which we need to sort out over the following months."
Briton Colin Stalgis has relatives in Australia who have provided DNA samples in the hope of finally finding whether their ancestor, Corporal Gregory Francis Stalgis, was among those found in the mass grave.
Corp Stalgis was just 21 when he was killed during the Battle of Fromelles. His body was never found.
His mother Annie, who died in Sydney in 1941, refused to accept he had died.
"She used to stand guard at the garden gate hoping he would come walking up the street," Mr Stalgis said.
"When they did the investigation to prove there were soldiers buried at Pheasant Wood, one of my relatives went to her grave and said: 'We've found him.'
"Some people are telling me not to get my hopes up but you live in hope."
* People who believe they have links to the Fromelles soldiers can telephone 1800 019 090 or visit the website http://www.army.gov.au/fromelles/
