The report was prepared by a new Australian brain initiative, dubbed AusBrain, to coordinate brain research efforts.
The goal of developing a bionic brain should be considered a kind of Apollo mission for Australian science, with the equivalent urgency of the 1960s space race, the report said, citing massive investment in brain research in the United States and Europe, with "China waiting in the wings."
It was Australian scientists who pioneered the bionic ear and the bionic eye, geneticist Bob Williams, who headed the report team, said.
"So we have a great deal of experience in what one might think of as outsourcing brain functions to computer chips," he told Britain's Guardian newspaper.
"It's obvious that the next development will be to work out ways for the brain to control the movement of an arm or leg," he said, predicting such an accomplishment was achievable withing five to 10 years.
The task will be difficult, he acknowledged, but said the research could have results to help in the prevention and treatment of illnesses such as Alzheimer's, post-traumatic stress disorder, autism and schizophrenia.
"Therefore there's every reason to think that as we understand the architecture of the brain better at the cell by cell level, we're going to get a greater understanding of what's going on at the metabolic level, that's causing a mental illness," Williams said.