The review will, more broadly, look at whether existing Commonwealth institutional arrangements and policy settings support an inclusive multicultural society, and make recommendations.

Australian Multicultural Foundation executive director and company secretary Dr Bulent Hass Dellal AO will serve as chair.

Speaking at the launch event in Sydney, Minister for Immigration, Citizenship and Multicultural Affairs Andrew Giles said the review was about "enhancing the capacity of government agencies and service providers to respond to the needs of our multicultural communities".

Mr Giles said that work had already begun in the Department of Home Affairs to better respond to the needs of multicultural communities, noting that the Multicultural Affairs team had moved from the Countering Foreign Interference division and into the Immigration section.

"The change, though it may seem bureaucratic to some, is symbolic of the role of Multicultural Affairs under an Albanese Labor Government," he said.

"A portfolio that, at its core, should be about embracing those who have settled in Australia, rather than focusing on who we want to keep out."

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Human rights advocate and former refugee Nyadol Nyuon OAM and Multicultural Australia chief executive officer Christine Castley will also co-author the review.

Panellist Ms Castley said she looked forward to taking part in the review, which falls 50 years after the first multiculturalism policy paper was published under the Whitlam government.

"I am genuinely excited to be a part in this once-in-a-generation opportunity to take an open and honest look at how we ensure genuine inclusion, tackle systemic barriers and engage in the robust conversations we need to have if we are to move forward as a stronger, better, fairer and more inclusive nation," Ms Castley said.

The panel will be supported by a reference group, which includes former Australian rules footballer Bachar Houli, Multicultural Youth Advocacy national manager Rana Ebrahimi, and Tasmania Australian of the Year John Kamara.

Mr Giles accused the former Coalition government of promoting "fearmongering and division surrounding multicultural Australians", and said the review was a "concrete step towards an inclusive country".

"Under their watch, a fragmented and inconsistent approach to engaging with CALD communities saw failures to translate vital health information during the pandemic, and government support and grant programs inaccessible to emerging migrant groups," he said, in a statement leading up to the review's launch.

The review is due to deliver its final report with recommendations to the minister by March 2024.