According to the Egyptian Middle East News Agency, the report found that blocked drains caused the Al-Salam Boccaccio 98 to sink and that the ship was overloaded and had used forged documents to conceal a shortage of safety equipment.
The Salam 98 sank in the Red Sea early on February 3 while on a journey from Daba in Saudi Arabia to Safaga in Egypt.
Published on Wednesday, the report also accused Egyptian authorities of a "wicked collaboration" with the owners to allow the ship to sail between Egypt and Saudi Arabia in spite of evident shortcomings.
The report said that as water sprayed by crew members tackling a fire built up on the deck, passengers dived down into the water and pulled out paper and plastic bags to try to unblock the drains.
The accident was one of the worst marine disasters in Egyptian history and has led to widespread criticism of the crew, the shipping company and the government regulatory authorities.
The report said: "This (the accumulation of water on the car deck) was one of the direct reasons for the ship listing and then sinking. It shows that they (the drains) had not been inspected by the Maritime Safety Board."
The 35-year-old ferry was carrying 1408 passengers and crew and about 220 vehicles.
The report said that by international maritime rules the ship should not have been carrying more than 1168 passengers. Mamdouh Ismail, the owner of the shipping line, told the AP that it was carrying 1312 passengers.
Out on bail
The report recommended that the authorities show "no mercy to those who caused the loss of Egyptian lives and corrupted the maritime safety commission."
The disaster was one of the worst
in Egyptian history
A copy of the report will be filed with the prosecutor general, the news agency reported.
Meanwhile, the owner of a Bahraini pleasure boat which sank last month and resulted in the death of 58 foreign nationals, was released on bail on Wednesday, according to the judiciary.
Abdullah al-Qubaisi, from the Al-Dana company that owned the vessel, was let out "because there is no longer any fear that he might tamper with evidence."
The shipowner had been remanded in custody since April 4 on suspicion of manslaughter in connection with the tragedy, in which he acknowledged he had had no insurance for the lease of the boat.