Australia is isolating vulnerable people, including children, on Nauru, with the specific intent that they suffer, Amnesty International says.
For four years the remote island has been part of Australia's renewed scheme to deter people from arriving in the country by boat.
The human rights organisation has just issued a new report, called Island of Despair.
Senior crisis director Anna Neistat, who interviewed dozens of the detainees in July, said asylum seekers were undergoing extreme suffering which amounted to torture.
Amnesty New Zealand's executive director Grant Bayldon said it depicted lives that were driven to the brink.
He said Australia was running secretive and abusive camps on Nauru, and it was a sense of despair that came through most strongly from the people detained there.
"We have uncovered evidence of shocking levels of physical abuse, sexual abuse, lack of medical attention, but it is really the despair, the mental health issues that are what comes through the most strongly and that what happens when you take away hope for people."
Australia's Department of Immigration and Border Protection is disputing the claims.
Department Secretary Mike Pezzullo said he vehemently rejected allegations Australia was breaching international conventions.
"I refute categorically, both on behalf of my own department and by way of explaining government policy in this regard, that it's not the Australian government's position, nor the position of this department that we flout any laws, international or otherwise."
Amnesty International said lawyers were looking at taking Australia to the International Criminal Court over its offshore detention centres.
Anna Neistat said Australia had put them there with the specific intention they should suffer.
"The system is illegal and we show in our report in great detail, how Australia is violating its multiple international obligations, including an obligation not to torture. There are lawyers who are communicating with the International Criminal Court to investigate Australia's offshore processing."
Meanwhile, Amnesty International is calling on New Zealand to take a lead in exerting international pressure on Australia over its detention centre on Nauru.
New Zealand has offered to take 150 of the asylum seekers, but Australia says it must deal directly with Nauru, and the offer is stalled.
Anna Neistat said New Zealand had a crucial role as one of Australia's key partners.
"International pressure should start from the region where New Zealand is undoubtedly the most serious player who could challenge Australia's policy and, to a certain extent, show to Australia that things can be done differently," she said.
Grant Bayldon said Australia seemed unlikely to budge so other nations needed to act.
"What they need most is some hope - hope that there is some end to what is effectively detention there on Nauru, and hope that they aren't forgotten. And that is what we are trying to do. We are working very hard on the Australian government, but also on other governments," he said.
Amnesty said there was no moral or rational reason why New Zealand could not take the 150 refugees it originally promised to take three years ago.
Most recently Australia has said it was happy with the offer but it was up to Nauru decide, though New Zealand had since said that its arrangement was with Canberra, not Nauru.
The New Zealand Government has a strained relationship with Nauru after it suspended a large part of its aid to the island a year ago, over concerns about the rule of law.
Grant Bayldon said most New Zealanders wanted this country to take a stronger stance over Australia's offshore detention camps.
Amnesty New Zealand commissioned research company UMR, which asked 750 people their views on whether New Zealand should speak out when there is evidence of abuses.
Mr Bayldon said the results were emphatic but the New Zealand government's position was unchanged.
"The Prime Minister John Key has never acknowledged, not even once, that there is anything wrong with Australia's offshore detention. In fact, his response just over the last day to revelations, fresh revelations of what is happening on Nauru, is that he met with the Nauru President at the Pacific Islands Forum and he assured him that the detention centre there was professionally run."
Seventy nine percent of all respondents said they wanted the New Zealand Prime Minister and government to take a stronger stance in speaking out against the evidence of abuses in Australian offshore detention camps.
Eighty six percent said New Zealand's government also had a responsibility to speak out when there was evidence of human rights violations being committed by other countries.
Labour leader Andrew Little said New Zealand should take a stronger stance.
"John Key should cause international embarrassment to Australia if indeed they haven't already been embarrassed enough. In an age of world-wide humanitarian crises, one that is on our doorstep, then we need to be applying a bit of a stiff arm on it and say 'we can help'."
Nauru hits back at latest criticism
Meanwhile, the Nauru Government has hit out at an Australian TV documentary, which it says is biased political propaganda and lies, and an insult to the people of Nauru.
The ABC's Four Corners programme, aired yesterday, featured interviews with asylum seekers smuggled out of the country over the past three years.
But the Nauru Government is dismissive, saying the Forgotten Children documentary shows children who are clearly being coached and the entire process stage managed.
The government says no child is in detention on Nauru, and children live with their families in safe and comfortable accommodation, mostly in new housing close to shops, facilities and beaches.
It says Nauru is not a violent country and has a crime rate lower than Australia's.
The government said the report was an embarrassment to journalism.
Nauru restricts the entry of journalists through a prohibitive visa application fee of US$6000 dollars.