1

Which one is correct ?

  1. "I don't know what was that"

or

  1. "I don't know what that was"
3

The second sentence is the correct word order. You may hear the first sentence spoken in conversation but it will be punctuated like "I don't know. What was that?"

  • Just a note to point out that the meaning of "I don't know. What was that?" is not especially close to the meaning of "I don't know what that was". – GreenAsJade May 30 '14 at 0:42
2

The correct answer, as Pavja2 said, is the second one. It's called an "indirect question". They aren't normal questions because they have the same word order as statements.

More examples:

  • I don't know where John is.
  • I wonder if he will come to the party.
  • Do you know where he went after school?