The Family Matters report, released by Secretariat of National Aboriginal and Islander Child Care (SNAICC), found 21,523 Indigenous children were in out-of-home care as of June 30, 2020, which represents one in every 15.6 First Nations children living in Australia.

It also found 79 per cent, about 17,000 children, lived permanently away from their birth parents, with less than 15 per cent being reunified with their families.

SNAICC is the national peak body for First Nations children.

Wiradjuri man and Family Matters co-chair Paul Gray said the figures were "getting worse for our kids".

“They are sadly almost becoming the majority of children in out-of-home care and I think that should give us significant pause,” he said.

“It should be of deep concern to everyone the experiences and these statistics that we're seeing nationally but also the sorts of response that we’re seeing from government.”

Despite last year's historic National Agreement on Closing the Gap to reduce the rate of over-representation of children in out-of-home care by 45 per cent by 2031, the report said future projections of Indigenous kids in care "remains deeply concerning" and could increase by more than 50 per cent over the next decade without major reform.