The inquiry, led by Greens senator Peter Whish-Wilson, zeroed in on the controversial funding arrangement which was made without the foundation soliciting it or going through a competitive tender process.

Senator Whish-Wilson said there was significant shortcomings with the intent, design and proposed implementation of the Foundation Partnership Agreement.

"The granting of $444 million to the Foundation was a highly irresponsible decision, hastily concocted by relevant ministers, without proper consideration of risks and potential effectiveness, no consultation with key stakeholders, and without having undertaken due diligence," he wrote in the report released on Thursday.

The committee was made up of three Labor senators, two coalition members and Senator Whish-Wilson.

Coalition senators issued a dissenting report, saying there had been "exceptional transparency" around the grant and rejected the majority of the Senate report's findings.

"Coalition senators reject the findings of the majority report and support the foundation's essential work that will protect and preserve the reef for future generations," Liberal senator Jonathon Duniam wrote in his dissenting report.

If the government decides to maintain the funding arrangement, it should take all necessary steps to ensure the foundation can't invest in anything that directly or indirectly contribute to climate change.

An annual performance review should be tabled in parliament, with independent and audited financial statements.

In the event the grant isn't paid back, the report recommends the auditor-general to undertake a second review of the partnership in late 2019/20.

The committee also urged the federal government to tackle climate change as an underlying cause of economic, social and environmental damage to the reef.

Australian Associated Press