Agriculture Minister Peter McGauran said he had ordered an investigation into the outbreak, which he said "almost certainly" came from Japan, including an assessment of whether Australia's strict quarantine regime had failed.
"We want to identify what went wrong so it can never happen again and so we can repair the breach," McGauran said. "There's no cover-up here."
The investigation is expected to focus on a quarantine station on Sydney's western outskirts, where the virus was first detected last week after a number of breeding stallions arrived from overseas in early August.
The highly contagious virus has since spread to stables at Sydney's top track Randwick, forcing the cancellation of spring races.
It has also crippled the multi-billion dollar racing industry for almost a week, forcing all race meetings to be called off and a ban on horse movements as authorities try to contain the outbreak.
A Brisbane property become the fifth in Queensland to be locked down Friday and the state's chief vet said more properties were under surveillance.
But there were signs the flu had been limited to New South Wales and Queensland states, with racing set to resume in Victoria, Western Australia and South Australia this weekend.
Victoria also lifted a ban on horse movements within the state, although strict controls remain on horses crossing the state border.
Racing New South Wales said a four million dollar (3.28 million US) compensation package the government announced this week would not be enough to tide over the devastated industry until the crisis eased.
"We've lost tens of millions of dollars through no fault of our own, someone has got to pay the damages this has caused," chief executive officer Peter V'Landys said.
He estimated compensation claims would run into hundreds of millions of dollars if the outbreak was shown to have originated from a government quarantine station.