Last-minute lobbying by West Australian farmers and business owners was not enough to have the legislation blocked, with the bill passing the Senate late on Monday night.
The legislation will mean an end to live sheep exports by sea on May 1, 2028, with a $107 million transition package to flow to affected farmers.
"We made a commitment at two elections to phase out the export of live sheep by sea, after years of community concern about the trade," Agriculture Minister Murray Watt said in a statement.
"Around 70 per cent of West Australians support ending this industry and the parliament has now acted."
Agriculture Minister Murray Watt said Labor was following through on its election promises. (Lukas Coch/AAP PHOTOS)
Keep the Sheep supporters travelled to Canberra on Monday to again plead their case, and they vowed to target marginal Labor seats if the legislation passed.
"We will be targeting every marginal Labor seat across this country to try and get what we need," WA Farmers president John Hassell told a media conference in Canberra on Monday.
Keep the Sheep's Ben Sutherland, who operates a truck company that transports sheep, said the Albanese government had ignored West Australians and regional communities.
"They have repeatedly tried to bury this issue. We won't let it be pushed down the agenda," he said in a statement.
"We tried to change the policy, but that hasn't worked. If we can't change the policy, we will change the government," he said.
The coalition has vowed to overturn the legislation if re-elected.
Labor has "once again treated farmers with contempt" by ignoring pleas to save live sheep exports, Nationals leader David Littleproud said, and live cattle shipments could be next.
"Farmers now know Labor is willing to sell them out and shut down a successful, world-class trade based on ideology," he said.
"This decision is simply Labor bowing down to animal activists, even though Australia has the world's best animal welfare standards."
WA Liberal senator Michaelia Cash said on Monday night a vote for the coalition was a vote for the state's vibrant sheep industry.
"There are some very basic questions that need to be answered by the prime minister in relation to turning his back on Western Australia ... Why do you hate WA farmers so much?"
But Senator Watt said the live sheep export trade had been shrinking for some time.
"Live sheep exports by sea from Australia have been plummeting over the last 20 years," Senator Watt said.
Moves to end the trade came after thousands of sheep died of heat stress en route to the Middle East (Richard Wainwright/AAP PHOTOS)
The legislation also won the support of Greens senator Mehreen Faruqi who wanted the trade dropped because of animal welfare concerns.
"Nothing can be done to make live export ships safe for animals, this cruel trade is irredeemable, and the only option is to shut it down," Senator Faruqi told the Senate on Monday night.
"Now it is beyond time, to shut down this industry, once and for all."
Angry farmers in June warned a parliamentary inquiry that travelled to regional WA some towns will die if the legislation passed.
Labor vowed to end the trade following animal rights concerns after thousands of sheep died of heat stress while en route to the Middle East.
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