The Salvation Army says it is ashamed and deeply sorry for the "brutal" abuse suffered by many children in its care.
The organisation, which operated a large number of children's homes around the country between 1893 and 1995, apologised to victims and their families for abuse that happened under its watch.
"These offences should never have happened," the organisation said in a statement.
"It was a breach of the trust placed in us and we are deeply sorry.
"The Salvation Army is ashamed of the abuse suffered by many children placed in our care during that time."
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A substantial part of evidence received by the Victorian abuse inquiry related to complaints of sexual, physical and emotional abuse in Salvation Army institutions from the 1930s to the 1980s.
"In a significant majority of this evidence, children were treated in a fashion that could only be described as brutal," the inquiry found.
"If the hierarchy of the Salvation Army was indeed unaware, this implies a culpable absence of proper supervision and inadequate concern for the welfare of the children in its care."
The committee conducting the inquiry said there were a number of Salvation Army homes where abuse was prevalent, notably the Bayswater Boys Home and Box Hill Boys Home.
Abuse was not only perpetrated by Salvation Army officers and employees, but cottage parents, holiday families and visitors to the homes.
The committee said the organisation kept minimal records, did not have any policies to deal with complaints by children during this time and when they did try to complain it was often met with more brutality.
It also failed to investigate to see if there were any systemic problems that may have contributed to the offending or to identify any other victims who may need assistance.
The committee noted it also failed to make any significant effort to provide pastoral care for victims already identified, but the organisation has said it will give attention to these deficiencies.
Malcolm Roberts, who represented the Salvation Army before the inquiry, would still not acknowledge that abuse had been endemic in its institutions and homes, the committee said.
The Salvation Army said while it cannot right the wrongs of the past, it will continue to helping victims in a compassionate way through support and compensation.
The organisation says action has been taken to ensure any abuse by its employees or volunteers will never happen again and its workers and clergy must have police and working with children checks to ensure children are safe in their care.
The Salvation Army was the largest provider for children in institutional homes in Victoria but stopped running them in the mid 1980s.
