It said that "Religious ministers, out-of-home care workers, childcare workers, registered psychologists and school [counselors] should be brought into line with police, doctors and nurses who are all obliged by law to report sexual abuse", according to The Sydney Morning Herald reports.
A five-year inquiry into child sexual abuse in Australia has released its final report, making more than 400 recommendations.
The restrictions would apply to anyone who has themselves been convicted of sex offences and also applies to those who have spent five years or more in prison for crimes such as serious drug, homicide or fraud offences, the ABC reports.
"It is clear that their approach to child sexual abuse by clergy was protective of the offender", it said.
We now know that countless thousands of children have been sexually abused in many institutions in Australia. "That's all it is".
More than 4,000 institutions have been implicated in abuse allegations, the commission found.
"Child sexual abuse in institutions continues today".
Do you think convicted criminals should be eligible for compensation under the scheme?(Read the final document here.) "We will never know the true number".
The commission said the Catholic Church had suffered catastrophic failures of leadership over many decades.More news: When Harry met Barry: Prince interviews Obama for BBC radio
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"It is not a case of a few rotten apples", the report said.
The president of the Australian Catholic Bishops Conference, Archbishop Denis Hart, said numerous commission's recommendations "would have significant impact on the way the Catholic Church and others operate in Australia".
He said the bishops would raise the celibacy and confession recommendations with the Vatican and apologised for the church failing children in the past. In many institutions, multiple abusers have sexually abused children.
Australia created the commission in 2012 to investigate decades of sexual abuse in religious institutions, schools, and other establishments - the only country in the world so far to initiate such a sweeping government-led inquiry.
The Vatican didn't respond to the specific recommendations in a statement Friday, though Catholic officials have previously rejected any link between celibacy and abuse and have reaffirmed the sanctity of the confessional.
The royal commission, Australia's highest form of public inquiry, was contacted by more than 15,000 people, including relatives and friends of abuse victims. And it said it was committed to helping the Australian church accompany victims in finding healing and justice.
"I would feel terribly conflicted, and I would try even harder to get that person outside confessional, but I can not break the seal", Hart told reporters. "The penalty for any priest breaking the seal is excommunication".
The panel on Friday called on the church to repeal its celibacy requirement for priests, and said clergy should face prosecution if they fail to report evidence of pedophilia heard in the confessional.
Former prime minister Julia Gillard, who had called for the establishment of the royal commission, said previous efforts to conduct such an inquiry were resisted, despite efforts by whistle-blowers to expose the abuses. "We know very well that this happens in families that are certainly not observing celibacy".