French national Antoine Dicenta, 51, and British man Graham Palmer, 34 are accused of running their yacht aground and fleeing in a dinghy to nearby Burton Island where one tonne of drugs were found hidden in seaweed.
Initially, local rescuers were concerned when they discovered a damaged yacht had struck a reef 60km off the coast of Australia.
The boat was spotted on Monday, triggering a major search and rescue operation.
Police, fisherman and locals searched for the pair but suspicions were raised when someone saw two men trying to hide a large stash of goods under seaweed.
But as the pair were trying to get back to their alleged stash of illicit drugs, one daring seal decided to uncover the whole escape plan.
"When they got on the island, the guys made a run for their tender and there was this big, huge seal asleep between them.They woke it up and it jumped up with its big chest out and bellowed at them.The guys basically had the choice of going through the seal or getting arrested and they ended up choosing getting arrested." Geraldton Volunteer Marine Rescue Service vice commander Damien Healy told ABC radio on Monday.