Secretary of Prime Minister and Cabinet Martin Parkinson announced on Wednesday that Mr Smith would conduct the review following the ABC's reporting of secret cabinet documents, which were found in two locked filing cabinets sold at a second hand furniture store. It has since been confirmed the documents came from PM&C.

Mr Moran, who was head of Prime Minister and Cabinet from 2008 to 2011, said it was Mr Smith's "substantial experience at a senior level within government" that made him ideal for the review, as well as his "great familiarity with the protocols and requirements for handling confidential documents".

The Smith review will begin after an investigation underway by the Australian Federal Police is completed. ASIO is also conducting a separate review.

"That investigation is expected to make its initial findings shortly," a PM&C statement said.

Mr Smith was Australia's ambassador to China from 1996 to 2000 and to Indonesia from 2001 to 2002. He was secretary of the Department of Defence from 2002 to 2006. He's a non-resident fellow at the Lowy Institute.

Mr Moran has previously said the people responsible should be "found and sacked," and on Wednesday said the implications for the wider public service would vary between departments.

"There's a minimum requirement for how people regard confidential materials and it's perhaps ensuring that everybody understands that," he said.

On Sunday, Prime Minister Malcolm Turnbull said heads should roll over the security breach.

"This is a disgraceful, almost unbelievable act of negligence. The idea that the public service - and this has been done, you know, in the department; this is not a political office or a minister's office - but the idea that public servants, entrusted with highly confidential documents, would put them in a safe, lock the safe, lose the keys, and then sell the safe without checking what was in it, it beggars belief," he said on ABC Insiders program.

Opposition leader Bill Shorten wrote to the Prime Minister earlier on Wednesday calling for a "wide-reaching" investigation and review that would hold senior departmental staff and relevant ministers to account.

"Procedures must be comprehensively overhauled to address the serious deficiencies that led to this event," Mr Shorten wrote.

The review could cover secure digital ways of handling documents, Mr Moran said.

"It's possible to do it in a way that tracks every movement of a document and every point of access to a document and whose read it and indeed how much of it. And it's also possible to use that system to essentially take a document back after its been used," he said.

The Community and Public Sector Union supports the review. Assistant national secretary Michael Tull also callewd for it to cover external contractors as well as public servants.

"This inquiry can and should examine the impact of contractors, consultants and other forms of outsourcing on the security and integrity of critical information held by Commonwealth agencies," Mr Tull said.

"Just in the past 12 months it's emerged that the personal details of thousands of Australians were mistakenly posted online by a contractor, and another contractor lost a manual on security arrangements at Parliament House. Sensitive Department of Defence information was also stolen by hackers when a contractor made a basic security blunder by using easily guessed passwords."