The live cattle trade with Libya, suspended since the 1996 BSE crisis, could resume before the end of September, according to the Minister for Agriculture.
But a formal document setting out the basis of agreed veterinary conditions for the resumption of the trade has still to be ratified in Tripoli before Irish cattle can be sent there.
Last night, however, Mr Walsh announced that excellent progress had been made in the negotiations with a six-man delegation from Libya.
The announcement came shortly after the delegation formally met the Taoiseach, Mr Ahern.
Mr Walsh's statement said the agreement was the breakthrough he had sought and he was pleased this issue had been resolved before the autumn trade which could be worth £70 million in the coming year.
The Libyan team had linked the opening of a permanent trade office in Dublin with the resumption, a request backed by the Irish Farmers' Association.
But the agreement document makes no mention of this Libyan office.
The IFA president, Mr Tom Parlon, favoured such a trade office, which he said would facilitate the cattle trade and trade in other areas as well.
It was learned last night that the formal agreement does provide for a technical agreement between the Republic and Libya under which Libyan students will receive scientific, technical and veterinary diagnostic training here.
The agreement also pledges to set up a system to build up trade between the two countries and suggests a joint economic commission be established at an early stage.
Sources close to the negotiators said it seemed that once agreement was reached on this commission, Libya would give a date for the reopening of the live trade.
The Compassion in World Farming organisation expressed extreme concern at the prospect of reopening the live cattle trade between the Republic and Libya.
In a statement yesterday, CIWF said a successful outcome to negotiations could result in further hardship for animals and added that a secretly filmed investigation conducted in Lebanon recently showed shocking scenes of brutality towards animals and even more appalling pre-slaughter handling.