Australia relied on "thin, ambiguous and incomplete" intelligence to go to war in Iraq, according to an inquiry.
"Thin intelligence": PM Howard with Australian troops in Iraq
But the independent report by Philip Flood, a diplomat and former spy master, clears Prime Minister John Howard of "politicising" intelligence.
Its conclusions echo those reached by separate US and UK inquiries prompted by the failure to find the banned Iraqi weapons that formed the case for war.
Australia sent 2,000 troops to Iraq last year; 900 are still in the area.
Prime Minister Howard commissioned Mr Flood's inquiry in March, on the recommendation of a parliamentary committee investigating the role Australia's spy agencies had played in the build-up to war.
The BBC's Sydney correspondent, Phil Mercer, says the Flood report, like its US and British equivalents, blames intelligence failures on spy agencies, sparing the politicians.
Investigators attached to Mr Flood's team interviewed Mr Howard, Foreign Minister Alexander Downer and Defence Minister Robert Hill.
The Flood report also says that Australia, like other countries in the region, was not aware enough of the threat posed by Jemaah Islamiah (JI), the militant group which has been blamed for the bomb
attacks in Bali in 2002 that killed more than 200 people, many of them Australian tourists.
The report says Australia's spies should have known more about the "terrorist capabilities and intentions" of JI.
But it says that there is no evidence Australia had any specific warning of the Bali attack.
Prime Minister Howard has hailed the report for clearing his government of allegations it interfered with pre-war intelligence on Iraq to fortify its argument for backing the US-led war.
Mr Howard is set to face the electorate in September or October this year in a campaign which pits him against the staunchly anti-war Labor Party leader, Mark Latham.
Mr Latham has pledged to withdraw what remains of Australia's Iraq contingent if he wins the election.
The Flood report makes several recommendations for the reform of Australia's spy agencies - all but one of which Mr Howard has said he will implement.
Mr Howard says he will not rename the prime minister's intelligence advisers, the Office of National Assessments (ONA).
The report also calls for intelligence assessments to be more transparent and accountable and for the ONA's budget to be doubled to A$25m ($18m) a year.