Scientists have found a lack of water in the Darling River system - due to the drought and excess use by irrigators - led to the death of millions of fish.
An expert panel on Monday handed down a report into three major fish kills near Menindee in December and January following a request from Labor.
It said the mass deaths were unusual in the combination of their severity, impact on large, older Murray cod and association with low flows.
"Our review of the fish kills found there isn't enough water in the Darling system to avoid catastrophic outcomes," panel chair Professor Craig Moritz said in a statement.
Dead fish on the riverbanks on the Murrumbidgee River at Redbank Weir. Source: Brendan Kennedy
"This is partly due to the ongoing drought. However, analysis of rainfall and river flow data over decades points to excess water extraction upstream."
He later told reporters, the Murray-Darling was a "system in crisis".
Labor leader Bill Shorten said the "startling" report presented an opportunity to accept that too much water was being siphoned from the system's northern basin and not enough was heading south.
"We stand on the precipice of trashing Australia's biggest river system," he told reporters in Canberra.
"We know what is happening and we know why it is happening. The only question is what will we do?"
He said a royal commission was a last resort and would wait to see how the government responds before going down that path.
The report said while the drought was severe, it wasn't unprecedented. "More significantly", it noted, was the excess upstream diversion of water for irrigation.
"Prior releases of water from Menindee Lakes contributed to lack of local reserves."
The panel - convened by the Australian Academy of Science at the request of federal Labor - also found that engagement with local residents has been "cursory, at best", resulting in insufficient use of their knowledge about how the system is best managed.
It has called for urgent action - within six months - to ensure there is sufficient flow in the Darling River to prevent stratification and blue-green algal blooms.
The scientists have also recommended the establishment of a Menindee Lakes restoration project to determine sustainable management and operation of the lakes system.
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