The condition of the environment was "poor" and "deteriorating" in some areas, despite improvements in the marine environment and the Murray-Darling Basin, according to the report.
To be released on Tuesday by Environment Minister Josh Frydenberg, the five-yearly dossier says Australia lacks overarching national policies that establish "a clear vision" for protecting and managing the environment, including climate change, between now and 2050.
A summary provided to Fairfax Media warns of increasing pressures from coal mining, the coal-seam gas industry, habitat degradation, land-use change and invasive species.
Further concentration of the country's population in coastal cities, particularly in the south-east corner, will also put "substantial pressure" on the environment, the report says, particularly if urban growth is "poorly planned and executed".
Mr Frydenberg told the ABC the report contained "positive stories", but acknowledged "there is much work to be done" in some areas.
"Climate change continues to be a major challenge," he said, stressing Australia was on track to meet its emissions reduction targets by 2030.
The State of the Environment report found climate change "is an increasingly important and pervasive pressure on all aspects of the Australian environment", and warned poorer Australians would bear the brunt of the damage.
"It is altering the structure and function of natural ecosystems, and affecting heritage, economic activity and human wellbeing," the report's summary said.
"Climate change will result in location-specific vulnerabilities, and people who are socially and economically disadvantaged are the most sensitive to climate change.
"Evidence shows that the impacts of climate change are increasing, and some of these impacts may be irreversible."
The report pointed to positive signs the hole in the ozone layer over Antarctica was "starting to recover" due to international efforts to reduce the use of ozone-depleting substances. But the Antarctic environment was also showing "clear signs of impact from climate change".
Although most marine environments were in good condition, the report noted record high water temperatures had caused "widespread coral bleaching, habitat destruction and species mortality in 2011-16".
In an opinion piece for Guardian Australia timed to coincide with the release of the report, Mr Frydenberg defended the Coalition's environmental record, pointing to the implementation of the Murray-Darling Basin Plan among other achievements.
"There is no room for complacency," he wrote. "Regardless of one's political persuasion, we all have a vested interest in protecting our commons."
Australian Conservation Foundation chief executive Kelly O'Shanassy said the report showed politicians were "failing to uphold their duty of care", while the big polluters "continue to greedily grab nature's gifts" for profit.
It came as the National Farmers' Federation declared its support for a market-based mechanism to reduce carbon emissions, such as an emissions intensity scheme in the electricity sector, which has been ruled out by the Turnbull government.
In a submission to Alan Finkel's review of energy security, the NFF said the current approach was not working, leading to farmers' power bills increasing two or three fold.
"The current system is broken," NFF president Fiona Simson said on Tuesday. "We want to make sure that in this instance this very important problem that we have is actually resolved with evidence-based solutions."
The story Impact of climate change 'increasing' and 'pervasive': report first appeared on The Sydney Morning Herald.