In many cases, schools have been destroyed or commandeered by armed forces, teachers have been killed or forced to flee because they are government employees or community leaders.
Children have also been recruited and forced to participate in the violence, according to the report, which focuses on 30 countries.
"Today the majority of victims from war are civilians, not soldiers, and those left destitute are mostly children," said Charlie MacCormack, president and chief executive of the US-based humanitarian organisation.
"The world cannot stand by, leaving these children without education and without hope or opportunity, in some cases for generations."
The report is part of Save the Children's five-year "Rewrite the Future" education initiative that will be launched by more than 40 countries.
The campaign will try to help millions of children in conflict-affected areas gain access to education.
Among the findings:
- In 2003, more than half of armed conflicts had children under 15 as combatants.
- More than 5 million children aged 6-11 years are out of school in the Democratic Republic of the Congo, and more than 6 million 12- to 17-year-olds have never been to school.
- In Nepal, between January and August 2005, more than 11,800 students were abducted from rural schools for indoctrination or forced recruitment into the militia.
- In Afghanistan, most qualified teachers fled the conflict. Now fewer than 15 per cent of teachers hold professional qualifications.
The report found that children living in these countries receive the least amount of assistance for education - only two percent of humanitarian funding - because major international donors find it too difficult to deliver aid to them.
Save the Children is calling for the international community to fill the funding gap by providing an extra A$7.7 billion in aid for education in conflict-affected fragile states.
Over the next five years, Save the Children said it will work to ensure that three million out-of-school children in conflict-affected countries enter school by 2010 and improve the quality of education for another five million children.