Consultation has begun on a time frame for phasing out live sheep exports by sea, with an independent panel to make recommendations when this was complete, Agriculture Minister Murray Watt said on Friday.
"We want to do it in an inclusive way through good consultation with people, we're not going to rush it," he said.
Senator Watt said no decision had been made on what form of compensation farmers could expect.
"I'm not sure that we necessarily are facing a situation where farmers will lose their business or go out of business," he said.
"Any issues around compensation, structural adjustment and those kinds of things are exactly the kind of things that we're going to be asking the panel to give us advice on."
Sheep exporters say they are disgusted by the government's push to meet its "dumb" election promise to phase out live trade by sea, while animal welfare groups have welcomed the move.
In a letter sent to Senator Watt on Friday, WA Farmers president John Hassell pleaded with the government to reconsider its commitment to the phase-out.
He warned it will negatively impact 3000 people associated with the industry, which is worth about $85 million a year.
Almost all live sheep exports are carried out in Western Australia.
"We think that the government's live export policy was a dumb commitment," Mr Hassell said in the letter.
"If there was ever a case study of improvement in an industry then the live exports is it."
The National Farmers' Federation has joined with 24 other peak groups to oppose the ban.
"Cancelling an entire industry based on activist demands sets a dangerous precedent," the federation's chief executive Tony Mahar said.
"What industry will be next?"
Under questioning from journalists, Senator Watt denied having any plans to ban live cattle exports.
"Our government supports the live cattle industry and we will not be phasing it out," Mr Watt said.
He said the live sheep export ban was following through on two election commitments to ban the trade and he will not changehis mind.Â
"I don't know how much more clear I can be that we will not be changing our commitment," he said.
The panel led by former CEO of the Murray Darling Basin Authority and senior public servant, Phillip Glyde, will embark on a six-month consultation process to map out the steps to the shutdown.
The panel includes former RSPCA Australia boss Heather Neil, who has lobbied against live sheep exports, and former minister and long-serving Northern Territory Labor MP Warren Snowdon, an advocate for live cattle exports.
The panel also includes WA agriculture expert Sue Middleton.
The RSPCA and Australian Alliance for Animals welcomed the government's "concrete next steps", describing the panel's establishment as an "appropriate and sensible move".
"It's good to see the government on track to setting an end date on this cruel and unfixable live sheep export trade," said RSPCA Australia CEO Richard Mussell.
"An independent panel, at arms-length from government, with a diversity of expertise - including animal welfare expertise - will be well-placed to advise the government on how best to achieve a phase-out."
Alliance for Animals' Jed Goodfellow said the move will help Australia's damaged international reputation.
"From our experience, there are no shortage of farmers out there who support an end to live sheep exports," he told AAP.
The panel is due to provide its report to the government by September 30.
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