"Overall, the state and trend of the environment of Australia are poor and deteriorating," the 2000-page report released on Tuesday concluded.
The report details "abrupt" changes in ecological systems over the past five years, with climate change exacerbating the threats.
The result, the report says, is a growing list of threatened species trying to survive in shrinking and degraded ecosystems that are being ineffectively managed with too little money.
"Our inability to adequately manage pressures will continue to result in species extinctions and deteriorating ecosystem condition, which are reducing the environmental capital on which current and future economies depend."
The report was completed six months before the election but the Morrison Government refused to release it.
Environment Minister Tanya Plibersek said while it was a confronting read, Australians deserved the truth.
"We deserve to know that Australia has lost more mammal species to extinction than any other continent,” she said.
"We deserve to know that threatened communities have grown by 20 per cent in the last five years with places literally burned into endangerment by catastrophic fires.
"We need to know that the Murray-Darling fell to its lowest water level on record in 2019 and that, for the first time, Australia now has more foreign plant species than native ones.”
The number of new species listed as threatened, or elevated to a higher category of threat, has increased by eight per cent since 2016 and will jump again due to the 2019/20 Black Summer bushfires, the report warns.
According to the report, 7.7 million hectares of habitat for land-based threatened species was cleared between 2000 and 2017. But almost all of that — 7.1 million hectares — wasn't assessed under federal environmental laws.
In response, the Albanese Government will develop new environmental legislation in 2023, including an overhaul of the Environment Protection and Biodiversity Conservation Act.
"I'm also happy to announce today that we will expand Australia's national estate," Ms Plibersek said.
"Our government will set a goal of protecting 30% of our land and 30% of our oceans by 2030. We'll explore the creation of new national parks and marine protected areas including by pursuing the east Antarctic marine park.”
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