It cited 2016 census data indicating almost one in four Indigenous households had no internet access.
The report noted instances of creativity and resilience during last year's coronavirus-induced school closures, including teachers dropping off hard copies of materials to offline students and others offering classes over the radio.
But more must be done to address limited learning opportunities for Indigenous students, especially those living in remote communities.
"COVID-19 has accelerated reliance on the internet across almost every area of life, including in education, which makes it more important than ever to urgently close the digital divide for First Nations students," report author Dr Scott Winch said.
"Every First Nations child should have the opportunity to learn and continue their education online."
The federal government could explore ways of working with telecommunications firms and equipment providers to promote digital inclusion.
The report also suggested it subside the cost of internet access and computers for First Nations students and trial consumer-led internet data donation programs.
It also proposed a faster roll-out of 5G cellular networks in communities with a large Indigenous populations, increased satellite internet access and a mechanism for the private sector to donate digital assets to First Nations students.
The report also said the government should add a new target dedicated to narrowing the digital divide to the Closing the Gap agreement.
The agreement, between Australian governments and the Coalition of Aboriginal and Torres Strait Islander Peak Organisations, aims to overcome inequality experienced by Aboriginal and Torres Strait Islander people.