In her report, Ms Broderick recommended increasing the number of women in the military and setting up a unit to probe sexual misconduct.
The review found evidence of harassment and abuse, but also said many had experienced no discrimination.
The assessment followed a series of sex scandals in the defence force.
"Our overarching finding is that, despite progress over the last two decades, I am not confident that, in all the varied workplaces that comprise the ADF [Australian Defence Force] today, women can and will flourish," Ms Broderick said.
She highlighted "ambivalence" about the importance of increasing the numbers of female service personnel and "a lack of understanding about the cultural and structural impediments to female representation".
The review found that the recruitment of women for the defence force had only increased by 1% over the last 10 years.
"The use of targets is required, both to improve recruitment and to broaden occupational opportunities available to women, including in combat roles," the report said.
The ADF needed to make greater efforts - such as looking at flexible working policies - to help both men and women combine work with raising a family.
The report also said women were "significantly underrepresented in leadership positions" and that despite resistance to quotas, "targeted interventions" were needed if this was to change.
Ms Broderick also recommended that a unit dedicated to investigating sexual misconduct be established, allowing confidential complaints to be lodged.
The review found that while most people saw the defence force as a safe working environment, some women had experienced "sexual harassment, sex discrimination and sexual abuse".
"We found that members frequently did not report these incidents ... because they feared that ... their career would be jeopardised, that they would not be believed or they would be subjected to a sometimes unresponsive chain of command investigation," she said.
Defence Minister Stephen Smith said the Australian government accepted all the proposals in principle.
He has asked the Chief of the Defence Force and the Secretary of the Department of Defence to ''determine the best way forward in formally adopting and implementing the... recommendations'', said a statement.
Women struggle to flourish in the Australian military, a review conducted by Sex Discrimination Commissioner Elizabeth Broderick has warned.