Australian Defence Minister Linda Reynolds confirmed the scandal could involve stripping soldiers of medals if misconduct is proven and they are ultimately convicted of crimes.
"The CDF is considering all of those options,'' she said.
Senator Reynolds said 39,000 Australians had served in Afghanistan and the report in "no way" undermined the work of the vast majority of these soldiers.
"They served with great distinction and 41 Australians lost their lives in that process,'' she said.
"Today we have, as minister, I could not be prouder of the work our men and women are doing on bushfire and Covid-19 assist.
Morrison said the unredacted report made for disturbing reading. A redacted version is expected to be released by the Australian Defence Force next week.
"There is some disturbing conduct here, but we cannot then take that and apply it to everyone who has pulled on a uniform and if we did this, that would be grossly unjust, grossly unjust,'' he said.
"I know that wouldn't be the view of people here or in government or anywhere else. We all share a deep respect for our defence forces, but we also share a deep respect for justice. It is about managing those two issues to the highest standards I think we place on them in Australia."
Morrison said the soldiers would be dealt with through "Australian justice" if charges are ultimately recommended.
Asked if this would mitigate against the possibility that soldiers could be called before the International Criminal Court, the Prime Minister confirmed this was the case.
"We believe so, yes. That is the important advice we have taken on this. We need to deal with this as Australians, through our own laws, through our on justice processes and we will, and I think that will say a lot about Australia,'' he said.
"Of course this report will be difficult news and all of our partners must be assured and those around the world who rightly hold the Australian defence force in high regard, I believe by the process we are outlining to you today shows why that is the case.
The report will not provide a brief of evidence however, with the Prime Minister describing the appointment of the special investigator as the "next step" rather than a new process.
"Some very serious issues were raised regarding conduct by some members of Australia's special operations task force in Afghanistan. It is our Australian way to deal with these issues with a deep respect for Justice and the rule of law, but also one that seeks to illuminate the truth, but also seeks to understand it because that is what must drive our response,'' Morrison said.
The Australian Prime Minister said the process would be allowed as much time as it needs to work through the complex legal issues involved.
