The report, completed in 2020, was only made public in the 24 hours to Saturday as a result of a Freedom of Information request.
It warns that at the time the report was completed, the state authority was on an "unsustainable financial trajectory".
"Until recently WorkSafe had been remarkably stable over almost 20 years, despite comparatively little supporting legislative change over that time," the 2020 report said.
"This stability is in contrast to many of the other schemes around Australia which have undergone significant changes over that period, generally in response to material deteriorations in their financial performance.
"However, WorkSafe is now at a tipping point in its history and is facing both internal and external threats to its financial sustainability."
To remedy these concerns, the report compiled by Finity Consulting proposed either significant premium increases or legislative reform, or both.
Payouts for mental injury claims were among the most significant factors leading to the scheme's "adverse performance", the report said.
It cited an accounting deficit of about $600 million at the time, equating to almost 25 per cent of one year's worth of premiums.
The Labor government has poured $1.3 billion into WorkSafe over the past two years.
This has allowed WorkSafe's average premium of 1.272 per cent to remain unchanged.
Worker compensation schemes were facing challenges in many jurisdictions, and Victoria was no different, WorkSafe Minister Danny Pearson said.
"A key factor is we are now seeing more mental injuries coming into the scheme," he said in a statement on Saturday.
"This is a natural flow-on from the advances we have seen in addressing mental health in the community as our government works to rebuild the mental health system."
The government will consult with unions, employers and legal experts in 2023 to ensure the scheme remained contemporary and fit-for-purpose, Mr Pearson said.
"Our priority needs to be helping people get back to work after an injury - and ensuring every Victorian has the opportunity to return to the workforce after an injury will be front and centre in these consultations," he said.
Mental injury claims accounted for more than 15 per cent of claims in 2021/22, up from about 13 per cent the previous year, according to WorkSafe's annual report.
The Finity report, initially commissioned by WorkSafe, was partly redacted.
