Earlier probes had concluded that the journalists were killed accidentally in crossfire between Indonesian troops and East Timorese defenders in the town of Balibo on October 16, 1975.
Dorelle Pinch, a deputy coroner in the state of New South Wales , was investigating the death of Brian Peters, one of the journalists who have come to be known as the Balibo five.
She found that Peters was "shot and/or stabbed deliberately, and not in the heat of battle, by members of the Indonesian special forces".
Pinch said her findings relating to Peters would be the same for the other journalists.
Peters and fellow Briton Malcolm Rennie were working for Australia's Channel Nine when they were killed, while Australians Greg Shackleton and Tony Stewart, and New Zealander Gary Cunningham, were working for Channel Seven.
"The journalists were not incidental casualties in the fighting. They were captured, then deliberately killed despite protesting their status," she said.
"I have formed the view after applying the requisite evidentiary tests, that war crimes may have been committed and I intend to refer the matter to the commonwealth attorney-general," she added.'Case closed'
A spokesman for Indonesia's foreign ministry dismissed the inquest's findings.
"It will not change our position and our assertion with regards to what happened at Balibo at that time," Kristiarto Legowo told the AFP news agency.
"For Indonesia, it is a closed case."
But the the leader of Australia’s opposition Labor party said those responsible for the killings should be held to account.
"This is a very disturbing conclusion from the coroner," Kevin Rudd told reporters.
The coroner said the killings were carried out "by members of the Indonesian special forces, including [commander] Christoforus Da Silva and Captain Yunus Yosfiah, on the orders of Captain Yosfiah to prevent [the journalists] from revealing that Indonesian special forces had participated in the attack on Balibo".
Pinch also said there was strong circumstantial evidence that the orders to kill the journalists "emanated" from the then-head of Indonesian special forces, Major-General Benny Murdani.
Yosfiah, a retired general who held the post of Indonesia's information minister in the late 1990s and is now a retired general, has admitted leading the attack on Balibo but denied involvement in the deaths of the journalists.
He and other Indonesian officials refused to testify at the inquest, the first open judicial inquiry into the deaths, which have long attracted accusations of a cover-up by Indonesians and Australians.
The families of the five welcomed the finding, saying that "proper respect" had finally been given the dead men as they exchanged tears and hugs at Glebe Coroner's Court on Friday.
Shackleton's widow, Shirley, also called for an inquiry into the death of a sixth Australian journalist in East Timor.
Freelancer Roger East is believed to have been murdered by Indonesian troops just after the invasion in December 1975 while investigating the deaths of the Balibo Five.
"He was the sixth Australian journalist murdered in cold blood deliberately and all these witnesses exist and nothing has ever been done," Shirley Shackleton said.
While Indonesia insists the case is closed, Don Willesee, the Australian foreign minister in 1975, told his daughter in his dying days in 2003 that the Australian government had covered up the affair, according to a report in The Australian newspaper this month.