The cannabis resin was discovered accidentally by fishermen when trawling the sea bed off the Aran Islands on Monday.
A special joint task force was set up by the Garda National Drugs Unit, the Irish Navy and Customs, once the crew alerted authorities.
Eight bales of the drug were retrieved.
“They have to be weighed and forensically examined, but there are an estimated 180-200 kgs,” said Niamh O’Donoghue, assistant secretary general for Revenue Customs in the Border/Midlands/West region.
With an estimated street value of €7,000 per kg, the haul is estimated to be worth between €1.2m and €1.4m.
The consignment was brought to shore by the cutter to Ros a Mhíl port, where it was loaded for transportation to Garda headquarters in Dublin for technical examination.
“The first questions for us is when were the drugs dumped, why were they dumped, for what reason?” said one Garda source.
He said it was not clear if the drugs were dumped at the location they were found or if had been brought there by the tide.
He said that unless the drugs were marked by buoys they could not have been found by criminals for collection.
Gardaí do not think the drugs are part of a consignment that was found 96km west of the Aran Island last July, but have not ruled out the possibility.
That haul of cannabis, worth €85,000, is thought to be part of a haul dumped 10 years ago.
The haul follows the accidental seizure of more than €100m of cocaine off the coast of west Cork last July. Senior officers are worried there might be a trend.
“It is something we’re conscious of, but we have to find out how long it’s there and was it going to be landed in Ireland, but we would be concerned about it if it’s a regular thing,” said the Garda source.
The EU police body Europol has highlighted the vulnerability of the coast of western Europe, including Ireland, to trafficking by sea.