An international tribunal should be set up in Kenya to try those implicated in clashes after December's disputed poll, an inquiry into the violence says.
The commission found that in some areas, the violence was planned and organised with the support of politicians and businessmen.
It said if no tribunal was formed a sealed list of those responsible would go to the International Criminal Court.
More than 1,500 people were killed and some 300,000 more fled their homes.
The BBC's Peter Greste in the capital, Nairobi, says the political split after December's elections became an ethnic one, and Kenya neared a civil war.
President Mwai Kibaki and then-opposition leader Mr Raila Odinga signed a power-sharing deal in February, forming a coalition government.
The commission of inquiry was appointed following recommendations by the international mediation team led by former UN Secretary General Kofi Annan.
Its report was presented to President Kibaki and Prime Minister Odinga and will be made public immediately.
Mr Annan is expected back in the country to receive the report on Friday.
On Tuesday, the cabinet said it would implement the recommendations of another inquiry into electoral fraud which called for a radical overhaul of the electoral commission.
Justice Phillip Waki, who headed the commission which probed the role of political parties and the state security forces in the violence, gave a summary of his recommendations.
"The tribunal will have an international component in the form of the presence of non-Kenyans on the senior investigations and prosecutions staff," Justice Waki said.
What started as spontaneous violent reaction to the perceived rigging of elections, later evolved into well-organised and co-ordinated attacks on members of President Kibaki's community and Party of National Unity (PNU), he said.
"These were systematic attacks on Kenyans based on their ethnicity and their political leanings... Guilty by association was the guiding force behind the deadly revenge attacks," he said.
The commission would give Mr Annan a sealed list of names of prominent politicians, businessmen and a section of the police force who were behind the violence and supporting evidence, Justice Waki said.
If an international tribunal was not created, the list would be handed over to the ICC in The Hague.
The commission found that the police force and other security organs were overwhelmed by the scale of violence and failed to act.
"This free-for-all was made possible by lawlessness stemming from an apparent collapse of state institutions and security forces," Justice Waki said.
The report also noted that the security forces failed to act on actionable intelligence on the likelihood of violence and other early warning signs.
A key part of the deal was the Waki Commission, set up partly to find out what was behind the orgy of violence, but also to make sure it never happens again.
Human rights say that in the past, the government has tended to ignore the findings of similar inquiries.
But they warn that the government cannot afford to do that this time round, if it wants to avoid another blood-bath.
President Kibaki assured Kenyans that the government would study the report carefully and said it would be discussed at the next cabinet meeting.
"This report provides us with an opportunity to learn from the past in order to avoid future pitfalls. It marks an important step forward," President Kibaki said.