The Defence Honours and Awards Appeal Tribunal has concluded no award of the VC or any other medal should be made to the 13 soldiers and sailors who were the subjects of its year-long inquiry.
The tribunal's decision, released on Friday, is supported by the federal government, after the cases were reviewed by independent experts.
In the 454-page report, the tribunal chaired by former attorney-general's department secretary Alan Rose found it wasn't possible for Australia to recommend honours in the imperial awards system.
It is possible to make retrospective recommendations in the Australian system, which replaced imperial honours in 1991, but only if there's a clear case of maladministration or the emergence of compelling new evidence.
"Extreme practical difficulties, such as gathering reliable evidence about past actions as well as the problem of second-guessing the commanders of the time make retrospective recognition difficult and likely to damage the integrity of the Australian honours and awards system," the tribunal said.
The inquiry into the vexed issue of retrospective VC awards to long-dead servicemen, some of whose deeds occurred almost a century ago, began last April.
It considered 11 former sailors and two soldiers from three wars. Among them was Private John Simpson Kirkpatrick, known as John Simpson, famed for transporting wounded men from the Gallipoli frontline to field hospitals on his donkey.
Despite an abundance of gallantry, none of the 99 VCs awarded to Australians has ever gone to a sailor.
The tribunal concluded that contrary to some submissions, there was no British bias against Australians.
Statistically, far fewer VCs go to sailors, with only 53 of 1354 imperial VCs going to members of Britain's Royal Navy.
A number of submissions suggested awarding a VC to the Unknown Soldier in lieu of unrecognised acts of gallantry.
The tribunal disagreed, citing former prime minister Paul Keating's 1993 speech that recognised the very ordinariness of the Unknown Soldier and argued he should not stand above any of the 102,735 listed on the Australian War Memorial's Roll of Honour.
The VC is awarded for exceptional conduct.