Inquiry chair Wyn Williams said on Tuesday he was satisfied that executives at the state-owned Post Office knew, or should have known, that its computer system was capable of error, despite publicly maintaining the fiction it was accurate.
From 2000 to 2013 the Post Office pursued branch managers for losses that appeared in their accounts but were in fact caused by flaws in an IT system supplied by Japanese computer company Fujitsu.
About 1000 people were convicted.
Public outrage about the scandal mounted last year after a TV dramatisation of the case, Mr Bates vs the Post Office, which led to legislation to exonerate those convicted.
In the 162-page first volume of his report, Williams called for urgent action to ensure "full and fair" compensation for victims.
His recommendations included free legal advice and compensation for family members.
He said it was impossible to ascertain exactly how many people had been impacted, but said there were about 10,000 eligible claimants across four compensation schemes.
Detailing 17 first-hand accounts, Williams said suffering ranged from those held liable for small amounts of money to those who were wrongly imprisoned, fell seriously ill or were driven to despair and suicide.
Postmaster Martin Griffiths was given notice of termination of his contract in 2013 after shortfalls in his accounts.
He then deliberately walked in front of a bus, suffering multiple injuries which caused his death at the age of 59.
Following a request from the inquiry, the Post Office named six former postmasters whose families said they had taken their own lives.
A further seven people who were not postmasters had also taken their own lives as a consequence of false shortfalls, according to their families, the report says.
Others suffered mental and physical health problems, bankruptcy and relationship breakdowns.
Business Secretary Jonathan Reynolds said the publication of the report was an important milestone for sub-postmasters and their families.
"I am committed to ensuring wronged sub-postmasters are given full, fair, and prompt redress," he said.
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