Sapper James Martin, Private Robert Poate and Lance Corporal Stjepan Milosevic were shot dead by Afghan National Army Sergeant Hekmatullah in August 2012 at a small patrol base in southern Uruzgan province.
Deputy coroner John Lock in the state of Queensland said an order from NATO's International Security Assistance Force (ISAF) to increase protections for troops after a spate of insider attacks was not passed down to the platoon level.
He said there was a "failure at a number of levels in the chain of command" to implement the order which required a reinforcement of protection measures.
It also called for the use of "guardian angels", a system requiring more than one armed guard present whenever soldiers were mentoring local troops.
"Would that have stopped Hekmatullah? I do not know and no-one can know," Lock wrote in his 34-page finding following the inquest into the troops' deaths, which concluded in June.
The Australians were not in a state of readiness, with some soldiers wearing gym gear, when the attack started.
Read: Australian soldier killed in Afghanistan
"What we do know is he would have seen a quite different defensive set-up and posture compared to the relaxed state of affairs he had seen during the afternoon and early evening," Lock said.
Lock recommended the Australian Defence Force review communication processes so intelligence information and risk reduction measures would be shared throughout command structures.
Poate's father Hugh said the inquiry, which started in February 2014, vindicated the soldiers families' fight to hold a civilian inquest.
"I certainly believe that (Robert) would (be alive if the order was passed on)," Brisbane's Courier Mail reported Hugh Poate as saying Tuesday.
An internal military report into the insider attack released in 2013 was highly critical of security measures in place at the time Hekmatullah opened fire on his colleagues with an automatic weapon.
"Where a review or inquiry identifies safety or security issues, Defence will take action to address these issues," the military said in a statement on Tuesday.
Following the attack, Hekmatullah fled to Pakistan before being captured and deported to Afghanistan, where he was last reported to be on death row for the killings.
At that time, NATO struggled to counter the so-called "green-on-blue" attacks in which uniformed Afghans turn their weapons against their international allies.
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