The Australian Human Rights Commission says the government's policy of indefinitely detaining children in Nauru is in clear violation of international human rights law.
Its report, The Forgotten Children, has called for all asylum seeker children detained in Australian, Christmas Island and Nauru camps for processing be released.
It says children are suffering from extreme levels of distress, and are victims of physical and sexual assault, and self-harm.
Its Commission's president, Gillian Triggs, says no other legal system comparable to that of Australia's allows children to be detained indefinitely.
"Under the convention on the rights of the child, a child may be detained only as a last resort. Indefinite detention in poor conditions without effective access to appropriate medical care, education, or supervision by our courts, amounts to arbitrary detention, contrary to the most ancient common laws that prohibit detention without trial."