Migrants and refugees who commit crimes are facing an unfair legal system where they end up being detained or deported after completing their sentences in jail.
The 35-page report, Prison to Deportation Pipeline, found that visa cancellations on character grounds increased tenfold since 2014 leading to a significant spike in the numbers of people held in immigration detention.
Latest government figures show there are 984 people in detention centres, with 824 of them with a criminal history.
The average period of time detainees spent in detention was 513 days (or about a year and four months).
Researchers from the Human Rights Law Centre and the University of Melbourne found that non-citizens have a "structurally different, more restrictive experience in prison" compared with Australian citizens.
While Australian citizens are freed after serving their sentences in the community, people who are subject to visa cancellation are "pipelined" from jail to being held in immigration detention centres.
"People on visas face a two-track prison system, where they cannot access programs, parole and post-release support available to others, simply because of their visa status," said Sanmati Verma, legal director at the centre.
"People on visas are effectively being doubly or triply punished."
Visa-holders subject to mandatory cancellations are provided with only 28 days for that decision to be overturned.
"This system sets up visa-holders to fail and to lose hope from the moment they are sentenced. It must be dismantled."
In a landmark ruling by the High Court last year indefinite immigration detention was deemed unlawful and unconstitutional.
This triggered the release of over 200 detainees, whose offences ranged from low-level to more serious crimes such as murder, into the community. They remained under strict conditions including wearing an ankle monitor daily and a curfew between 10pm to 6am.
This month, the High Court in a majority ruling found these measures were punitive.
In response, Home Affairs Minister Tony Burke introduced legislation to reinstate electronic ankle bracelets, curfews and the power to remove people who have had visas cancelled to third countries.
"The first priority is not ankle bracelets or detention for these people, our first priority is that we don't want them in Australia at all," the minister said in parliament.
"That is why we introduced powers...to improve the government's capacity to remove people from this country in this situation," he added.
The report argued visa cancellation powers do not offer a restorative path for offenders after jail by either exporting the problem to other countries or detaining them further.
They recommended repealing mandatory visa cancellation provisions and reviewing standards relating to prison placement, programs, education and parole for non-citizens.
