The report said the majority of those killed were captured when they were killed and therefore protected under international law
Australia said on Thursday that 19 current and former soldiers will be referred for potential criminal prosecution for allegedly killing 39 Afghan locals, the majority of whom had been captured and unarmed.
Detailing the findings of the long-awaited inquiry into the conduct of special forces personnel in Afghanistan between 2005 and 2016, Australia's General Angus John Campbell said there was credible information of 39 unlawful killings by 25 Australian Special Forces personnel in 23 separate incidents.
All of those kills were outside the "heat of battle", Campbell said.
"These findings allege the most serious breaches of military conduct and professional values," Campbell told reporters in Canberra.
"The unlawful killing, of civilians and prisoners is never acceptable."
The report said the majority of those killed, which included prisoners, farmers and other Afghan locals, were captured when they were killed and therefore protected under international law.
As a result, Campbell said 19 current and former members of Australia's military will be referred to a soon-to-be appointed special investigator to determine whether there was sufficient evidence to prosecute.
Australia's Minister for Defence Linda Reynolds said last week that Canberra had been advised that local prosecution would negate charges at the International Criminal Court at The Hague.
Australian Prime Minister Scott Morrison had earlier warned the report would include "difficult and hard news for Australians", but few expected some of the most shocking revelations.
While the report was heavily redacted, it included allegations that senior special forces personnel ordered the killing of unarmed Afghans.
"There is credible information that junior soldiers were required by their patrol commanders to shoot a prisoner, in order to achieve the soldier's first kill, in a practice that was known as 'blooding'," the report read.
Once a person had been killed, those allegedly responsible would stage a fight scene with foreign weapons or equipment to justify their action, the report concluded.
The actions did not immediately come to light due to what the report concluded was a culture of secrecy and
compartmentalisation in which information was kept and controlled within patrols.
The Australian report recommended Canberra should compensate victims' families even without a successful prosecution.
Morrison spoke with Afghan President Ashraf Ghani ahead of the report's release, a source familiar with the conversation said.
Australia has had troops in Afghanistan since 2002 as part of the U.S.-led coalition fighting the Taliban militia.