Four men, including the chief officer of an international livestock carrier named the Al Kuwait, have been charged over their alleged roles in the crime plot, Western Australian Police say.
"A significant amount of cocaine has been taken out of the hands of criminal entities," Assistant Commissioner State Crime Tony Longhorn said.
"We can confidently say it's (from) South America.
"The cartels are having a prolific impact on the production and distribution of illicit drugs worldwide."
A fisherman alerted police on November 6 after finding large packages tied to floating drums about 30km off the coast north of Perth.
Officers seized the bundles, estimated to contain about 525 kilograms of cocaine, or more than 2.6 million individual street deals, with a street value of more than $170 million.
The drugs were dropped into the ocean from a livestock carrier on its way to Fremantle Harbour between November 1 and 3, police said.
Officers were already investigating the potential for criminal activity in the area after emergency services rescued two Sydney men, aged 19 and 36, on a boat taking on water off the same stretch of coast on November 3.
Local residents reported the men to police after spotting their "incompetence".
"It triggered the local community, people to be a little bit suspicious," Mr Longhorn said.
"They know when people don't belong on a boat or in the ocean."
One of the men was also aggressive towards his rescuers, resulting in police being called for that incident.
Investigators also identified a 52-year-old Perth man, who is also alleged to be part of the shore party.
Police allege the three men made several attempts to retrieve the cocaine from the ocean.
"One lot got horribly bogged on the beach in Lancelin trying to retrieve it, and the second lot forgot to put their bungs in their boat," Mr Longhorn said.
Investigators believe the men may have successfully collected some cocaine.
They are also searching for a fifth man, who is also alleged to be part of the shore party.
Officers charged the livestock carrier's chief officer on November 7 with attempting to import a commercial quantity of a border-controlled drug.
The 46-year-old Croatian national was remanded in custody to appear in Perth Magistrates Court on January 23.
During a search of the ship, investigators found a blue drum and ropes police will allege are similar to those found with the drugs.
"There was also some repaired railing, which looked as though it had been cut to enable the offloading of the commodity and then re-welded," Mr Longhorn said.
The three other men have also been charged with various drug offences.
The two Sydney men were extradited to Western Australia and have appeared in court.
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