The government has already acknowledged that Australian citizens Vivian Alvarez, a man known as Mr T, and resident Cornelia Rau, were wrongfully incarcerated.
Former Minister for Immigration, Philip Ruddock, has now confirmed 26 detention cases have been identified as Australian citizens.
They are among 220 possible wrongful detention cases being investigated by the Commonwealth Ombudsman.
Mr Ruddock confirmed that the cases were being investigated, after South Australian Labor MP Steve Georganas wrote to the Federal Government six months ago to find out how many people had been mistakenly detained.
Shock
Lawyer George Newhouse, who is representing Vivian Alvarez and Cornelia Rau in their compensation cases against the Federal Government, says he is shocked by the news.
"To think that there are 24 or 25 other people who've gone through the same sorts of experiences is truly horrifying and something that we really need to get to the bottom of," he said.
Refugee advocacy groups are calling for a full inquiry into the cases.
Refugee Action Coalition (RAC) spokesman Ian Rintoul says the entire Immigration Department should be fully investigated.
He says he received a reply last week stating that 26 wrongful detention cases were currently being investigated by the ombudsman.
"I think the revelations simply add to a very long list of incompetence by the Government and at a time when the Government is talking about sending all asylum seekers to Nauru," he said.
"I think there's a big question mark over the way the department actually handles its affairs."
Mr Rintoul says a full investigation is needed.