WA Minister for Agriculture Kim Chance said WA Government contacts in Egypt and Libya help broker the deal to offload the Cormo Express at Eritrea.
Mr Chance said it was only when the Federal Government announced the sheep were leaving Kuwait for the Cocos Islands that Eritrea became more interested.
"The whole climate of discussion changed when they said we would take them back," he said.
He said the Saudis would probably still be able to buy Australian sheep for the coming Haj through the United Arab Emirates.
Australian governments and livestock industry groups heaved a sigh of relief last Friday with news the first of 52,000 sheep stranded on the Cormo Express were unloaded in Eritrea.
The Federal Government has given the sheep to Eritrea, along with $1 million and 3000 tonnes of pellet feed.
Eritrea is a small North African country that faced Saudi Arabia from the other side of the Red Sea, with some speculation the Saudis could still end up with the sheep.
Just under 10pc of the original 57,000 sheep consignment, which left Fremantle on August 6, died at sea.
The cost of resolving the Cormo Express incident was estimated at about $10m, which could be recouped as a levy on livestock exports, which would reduce livestock prices to farmers.
Last Friday's announcement that a home had been found for the sheep ended tension building between livestock industry groups and government on whether the sheep should be slaughtered in Australia or at sea.
Saudi Arabia rejected the sheep on August 21, supposedly because 6pc had scabby mouth. The accepted scabby mouth level was 5pc.
An Australian veterinarian on board claimed scabby mouth was at 0.35pc with world animal health veterinarians also giving the sheep a clean bill of health.
More than 50 countries were approached to take the sheep, but the four or five countries refusing the sheep had been part of an industry fallback option.
"In the past, industry has had little difficulty in placing rejected shipments in other countries, but those options closed on this occasion," Federal Agriculture Minister Warren Truss said.
He challenged industry leaders who opposed the return of the Cormo Express sheep to identify practical alternatives.
"Work to date suggests it is possible to bring animals back to Australian under strict quarantine without damage to Australia's pest and disease-free status," he said.
He would release a quarantine risk evaluation report on bringing the sheep back to Australia.
Mr Truss has announced a review of the livestock export industry, with particular reference to the Cormo Express incident.